Barloworld keeps ploughing ahead

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Johannesburg - Barloworld delivered a solid performance in the first quarter of its financial year to December, with the overall trading results better than in the previous year, the distribution group said yesterday.

It said the equipment southern Africa business delivered a strong result for the quarter despite the ongoing slowdown in the mining sector in southern Africa. Greater-than-planned activity in its extended mining product range and an improved performance in Angola contributed positively.

The extension of the mining product range is the result of Barloworld’s acquisition in 2012 of Bucyrus International distribution businesses in southern Africa and Russia from Caterpillar for a total of $225 million (R2.5 billion at yesterday’s rate).

The group said after-sales revenue in the equipment southern Africa business also reflected pleasing growth compared with the previous year.

The order book for southern Africa last month remained in line with the book in September, with orders for its extended mining product range continuing to represent the majority of the order book.

However, the slowdown in coal mining continued to have an effect on activity in Russia and the order book had reduced slightly from September, it said.

The group said there were some early signs of improving economic conditions in Spain, although overall activity in Iberia remained subdued in the first quarter.

Barloworld said its automotive and logistics division had shown strong trading compared with the prior year across all the business segments.

New vehicle sales were marginally down following the supply disruptions in the motor retail operations in southern Africa, but used volumes had increased, it said.

The group said the Australian motor retail operations performed in line with expectations and fleet services traded well ahead of the previous year.

Barloworld said that overall the logistics business continued to show improvements because of operational efficiencies and the disposal of the loss-making freight forwarding business in the Far East while it had benefited from the contribution of Manline Logistics, with the southern African operations ahead of the previous year.

The merger between Barloworld Logistics’s dedicated transport services division and the Manline group was concluded and effective from January 30 last year, resulting in the merged Barloworld Transport Solutions becoming a 50.1 percent-held subsidiary of Barloworld Logistics.

Barloworld said its global power business had continued to expand in the first quarter and was benefiting from good growth opportunities across all lines of business.

Barloworld Handling disposed of all the shares in its materials handling business in the Netherlands last month, but the group did not disclose the identity of the purchaser or the price paid for the business.

The group gave notice in May that it was considering “strategic options” for this business, but did not have any plans to get rid of its southern African handling business.

Barloworld last year sold its Belgium handling business for e7.5m (R113.4m), following the disposal in 2012 of its US handling business to Briggs and LiftOne for about R460m and UK handling business to Briggs Equipment for R465m to enable the continued redeployment of capital into higher-returning opportunities.

The group’s interim financial results are expected to be released in May.

Its shares lost 3.18 percent to close at R101.50 yesterday. - Business Report


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