Johannesburg - Barloworld has reported signs of increased activity in the mining industry, with the listed distribution group recently tendering on two long-deferred mining tenders worth a total of R2.8 billion.
Clive Thomson, the group’s chief executive, yesterday also highlighted the recent award to the group of three contracts related to infrastructure projects worth more than R400 million.
Read: Barloworld feels impact of weaker demand
They were a R131m contract for the supply of 36 units, comprising a combination of loaders, dozers and various support equipment for an Armscor project; a R115m contract awarded in March by the Gauteng Department of Roads and Transport for the supply of a fleet of 35 units; and a R157m contract award last month to supply of 36 units to Eskom subsidiary Roshcon.
The contribution of mining equipment sales by the southern African equipment business declined to 35 percent of total new equipment sales in the six months to March from 46 percent last year.
“Since 2012, this (year) will be the fourth year of consecutive decline in our mining equipment deliveries as mining companies have curtailed their capital expenditure and are focusing on cash flows and have postponed any new mining investments or brownfields expansion,” he said.
But Thomson said in April the group tendered for the supply of 103 units for the Palaborwa Copper Mining Company for an expansion project for the underground mine to expand and extend the life of the mine to 2033.
Expansion project
He said the value of the equipment tendered on was R1.3bn and if the group was successful in the tender, it would deliver those units over the next six years.
“That tender is yet to be adjudicated but is a sign that activity is starting to happen on the ground,” he said.
Thomson said a tender for the Verdanta Gamsberg open-pit zinc mine project in the Northern Cape was submitted two weeks ago, involving a combination of hydraulic mining shovels, mining trucks, some surface drills and a range of support equipment valued at R1.5bn.
Barloworld’s equipment southern Africa firm order book declined to R1.2bn at end March from R1.7bn compared to the previous corresponding period, which was attributed primarily to the weakness in the mining sector and shorter lead times from Caterpillar.
Barloworld yesterday reported a 9 percent decline in headline earnings a share to 335c in the six months to March from 367c in the previous corresponding period.
Thomson attributed this primarily to a loss of R27m incurred by its joint venture at the Glencore Katanga mine in the Democratic Republic of Congo compared to a profit of R110m last year because of a bad debt provision and the temporary suspension of mining activities at one of the group’s largest customers from December because of a pit wall collapse.
Group revenue rose by 4 percent to R31.9bn from R30.7bn, largely because of improvements by the automotive and logistics business.
Operating profit rose by 1 percent to R1.75bn from R1.74bn. An unchanged dividend of 115c was declared.
Shares in Barloworld dropped 6.79 percent yesterday to close at R65.62.
BUSINESS REPORT