CLIVE THOMSON
Barloworld's automotive and logistics division's revenue increased by R2.3-billion during the financial year ended September 30, 2014
Photo by: Duane Daws
The revenue of JSE-listed Barloworld’s automotive and logistics division increased by 8.1%, or R2.3-billion, to R31.1-billion during the financial year ended September 30, 2014, excluding income that had been generated by the group’s Motor Retail Australia business unit, which was sold in April 2014.
Barloworld CEO Clive Thomson states that the increase can be attributed to the division’s “improved operating efficiency and disciplined cost control”.
The automotive and logistics divisions also raised their operating profit by 24% in 2014 to R1.6-billion, while the operating margin increased from 4.6% in 2013 to 5.3%.
Meanwhile, the logistics segment of Barloworld’s logistics and automotive divisions generated revenue of R4.4-billion last year, a similar result to 2013’s, while Barloworld’s transport business made significant improvements last year, owing to the acquisition of diversified logistics group Manline in 2013.
The transport business also helped the logistics segment increase its operating profit by 22% to R122-million, excluding the R20-million receivable provision from Barloworld’s furniture retail client, Ellerines.
“The supply chain management profitability was adversely impacted on by the provisioning required for the Ellerines contract, following its business rescue proceedings in early August,” Thomson explains, adding that a R76-million provision was made for the impairment of intangibles and other assets relating to the contract.
However, he notes that the logistics segment had a loss in freight management and services in 2014, owing to poor freight volumes in Spain and reduced sea and air freight volumes in the Middle East, following the loss of a significant customer in January last year.
Thomson is positive that Barloworld’s logistics segment will maintain its growth in 2015. “The transport business will benefit from the organic capital deployed and acquisitions finalised in 2014. Further the international logistics businesses are expected to improve in 2015 as a result of new contracts that have been secured and various actions taken,” he concludes.