Bell Equipment: Unrest cuts earnings by more than half

LABOUR unrest contributed to the earnings a share of Bell Equipment slumping by 60 percent to 62c in the six months to June from R1.56 in the corresponding period last year. Revenue rose 14 percent to R3.4 billion from R3bn. However, low production volumes with a high fixed cost structure contributed to operating profit declining by 39.5 percent to R132.3 million. Gary Bell, the group’s chief executive, said yesterday that the challenging environment, resulting from lower economic activity in many of the global markets in which the group operated, and continued uncertainty about the future, had led many of its customers to take a more cautious approach to capital equipment purchases. Bell said labour unrest and instability in recent months following protracted wage demands had also had a negative impact on the group’s domestic market. Lower levels of mining activity had also affected profitability. Although revenue for the six-month period was 14 percent higher than the comparative period last year, factory capacity utilisation was planned at much lower levels to correct inventory levels and align to market demands. The shares surged 5.15 percent to close at R14.09 yesterday. – Roy Cokayne