Barloworld CEO Clive Thompson
While trading conditions remain challenging for some of its businesses, Barloworld notes that the industry and geographic diversity of the group’s operations is providing some resilience.
“Equipment Southern Africa continued to be impacted by a slowdown in mining activity [in the six months ended March 31,] while construction revenues were higher and the aftermarket held up well despite certain customers delaying equipment maintenance,” CEO Clive Thompson said in a presentation of the company’s interim results on Monday.
The group’s headline earnings a share decreased by 9% year-on-year to 355c for the six months under review, while basic earnings a share were 4% higher year-on-year at 368c.
Earnings before interest, taxes, depreciation and amortisation were marginally down to R2.98-billion, with depreciation and amortisation decreasing by 2% as a result of a reduction in depreciation following the rental fleet decrease in equipment.
Revenue for the first six months increased by R1.3-billion to R31.9-billion with the bulk of the improvement in automotive and logistics, which showed an increase of R981-million.
Revenue for the Equipment Russia division was 22% in dollar terms, while Equipment Iberia was flat in euro terms.
Rand revenues for both regions, however, benefited from translation gains.
Higher mining equipment and aftermarket deliveries had resulted in trading in the Equipment Russia division being ahead of the prior period.
Equipment Southern Africa recorded a R689-million decrease in revenue, despite the benefits of the weaker rand in operations outside South Africa.
The division recorded a 15% decrease in operating profit owing to lower mining capital expenditure and production cutbacks that negatively impacted on equipment demand.
Meanwhile, Barloworld, which represented Avis in various countries, said its automotive division had delivered a satisfactory performance in a challenging trading environment, while its logistics business delivered operating profits ahead of last year on the back of organic growth.
Operating profit for the automotive and logistics divison was down down 2% to R819-million, with declines in the motor trading and Avis fleet businesses offset by improved profits in car rental and logistics.