CAPE TOWN - HEAVY equipment and automotive group Barloworld traded well in the three months to December 31, 2020, supported by actions taken earlier in the year and recent acquisitions performing better than expected.
The operating performance was in line with the movement of the share price, which increased 2.36 percent to R93.26 on the JSE on Friday, a price that was up a whopping 63 percent over three months. The share closed up 3.6 percent at R94.38.
The group said in an update for the quarter, however, that overall trading conditions remained affected by the Covid-19 pandemic, volatile commodity prices and infrastructure cycles.
The three-month period benefited from the easing of lockdown restrictions, the incorporation of Equipment Mongolia, and of Ingrain, formerly Tongaat Hulett Starch, from November 1, 2020.
Equipment Southern Africa's performance was lifted by the resilience of the mining sector. Machine sales were stronger while parts sales were in line with the prior year.
Operating profit for this division was in line with the prior year, supported by cost-cutting measures initiated in 2020. The firm order book at the end of December 2020 remained strong.
Bartrac, the joint venture in Katanga province of the Democratic Republic of Congo, remained under pressure, generating a loss due to subdued trading and non-trading impairments.
Equipment Eurasia's first quarter performance was above expectations both from a revenue and operating perspective, driven mainly by strong mining sales and good margins.
The incorporation of the Mongolian business buffered Russia's depressed after-market activity with operating profit above the comparative period. The firm order book to December 2020 remained strong.
In the automotive division, trading was up on the prior year mainly due to lower costs and improved margins.
Revenue was below the prior year with new and used car sales down due to the contracted economy.
The lockdowns negatively impacted car rental days, although a gradual increase in billed days was supported by inter-provincial travel from September.