JOHANNESBURG - Favourable global commodity prices and increased mining activity boosted the operating performance of the equipment division of Barloworld, the listed distribution group’s largest division, in the six months to March.
The group yesterday reported that it had a “much improved result”, particularly on the back of strong earnings in its southern African and Russian equipment businesses.
It said it expected headline earnings a share, including both continuing and discontinued operations, to be between 25percent and 35percent higher than in the previous corresponding six-month period.
This translates to an expec- ted headline earnings a share range of between 456.1cents and 492.6c for this reporting period, compared to 365c in the previous period.
Barloworld expects headline earnings a share from continuing operations to be between 10percent and 20percent higher than in the prior period, which translates to a range of between 440c and 480c.
The group in April this year reported that it had disposed of Iberia equipment business, with overall proceeds of the transaction estimated to be R2.4billion, which was a small premium to the net asset value of the business at end-September last year.
It said the transaction was expected to close by no later than July 2 this year after all the conditions had been met.
Shares in Barloworld closed 0.57percent lower on the JSE yesterday at R160.66.
Joint venture
Barloworld said the favourable global commodity prices and increased mining activity had also assisted their joint venture in the Katanga province of the Democratic Republic of Congo to deliver strongly improved earnings for the period.
Equipment Russia had continued to benefit from greenfield and brownfield mining projects and a recovery in commodity prices, particularly in the coal sector, and mining projects, it said. The business produced record revenue and operating profit in US dollars during the period.
Its automotive division produced solid results, despite challenging market conditions, with revenues negatively impacted by the sale and closure of a number of BMW and GM dealerships in the latter part of last year. However, Barloworld said both operating profit and operating margin for the automotive division exceeded the first half of last year. It said revenue in its logistics division was negatively impacted by lower activity.
Barloworld expects to publish its interim financial results on May 21.