Bell Equipment says Zimbabwe's currency crisis dented profits
Bell Equipment, which makes trucks for the mining sector, says Zimbabwe’s currency crisis took a bite out of its 2018 profits.
The group said on Monday its net profit in the year ended December grew 2% to R276.4m, as revenues rose 10% to R7.5bn.
Profits were dented by “a substantial devaluation” of the company’s assets and liabilities in Zimbabwe following the announcement of a new local currency in that country, and higher interest charges on borrowings.
A currency devaluation loss from Zimbabwe of R87.4m was recorded, Bell said.
Excluding those losses, “the group has maintained the positive momentum sparked in 2017”, it said.
“The majority of our offshore focus markets for the articulated dump truck (ADT) product — Europe, the US and Southeast Asia — have enjoyed good economic performance and as such, we are encouraged by the outlook for these markets.”
In the US, residential developments were driving demand for these trucks, which are used in bulk earthworks.
“Demand also improved in Canada thanks to more stable commodity prices,” Bell said.
While large infrastructure projects in Europe were boosting demand for these trucks, “we are mindful of the potential impact Brexit negotiations may have on this market”.
Sales in SA and the rest of Africa were under pressure, with investors remaining cautious about SA’s mining industry, the company said.
Bell plans to launch a new series truck prototype by the end of June.
The group declared a final dividend of 25c a share, taking the total dividend for the year to 45c, the same as the prior year.