Barloworld profit up on unit sale

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Caterpillar111 Reuters. A scratched and worn Caterpillar logo.

Johannesburg - Barloworld, a South African distributor of Caterpillar’s construction machinery, said first-half earnings surged 72 percent, boosted by profit arising from the disposal of a motor-retail unit in Australia.

Net income for the six months through March rose to 1.05 billion rand from 609 million rand a year ago, the Johannesburg-based company said in a statement today.

Revenue advanced 4.6 percent to 29.9 billion rand, it said.

“Our Australian motor-retail operations were disposed in the period for 1.3 billion rand realising a profit of 370 million rand,” Barloworld chief executive Clive Thomson said in the statement.

“This continues our strategic objective to redeploy capital into those businesses earning the highest financial returns.”

Barloworld is benefiting from higher demand from African mines for spare parts and services, offsetting impact from the political crisis in Ukraine.

The company said May 8 that trading in equipment in Russia was pressured by mining-industry project deferments and slower economic growth.

Barloworld also operates car dealerships and a logistics unit.

“Overall the group is expected to produce a solid result for the full year and is well placed to benefit once the global mining cycle moves into a recovery phase,” Thomson said.

The company estimated on May 8 that headline earnings per share for the period, including discontinued operations, were 8 percent to 12 percent higher than a restated 3.04 rand.

The stock declined 4.1 percent that day.

Barloworld shares have advanced 13 percent this year, outpacing the 31-member FTSE/JSE Africa General Industrials Index.

The company has a market value of 26 billion rand.

The company declared an interim dividend of 106 cents for the period, a 10 percent increase compared with a year earlier. - Bloomberg News

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