Barloworld’s quarterly revenue slides amid mining slowdown

A 550 kVA Cat C15 diesel generator set being assembled at Barloworld Power’s Boksburg facility. Photo: Supplied

A 550 kVA Cat C15 diesel generator set being assembled at Barloworld Power’s Boksburg facility. Photo: Supplied

Published Feb 16, 2024


Barloworld, in a voluntary trading update, said yesterday that its revenue had slid 5% for the four months to January 31, 2024 due to reduced sales volumes in some of its businesses, following a slowdown in the mining sector, continued geopolitical conflicts and a reduction in consumer demand in its consumer industries vertical.

In its Industrial Equipment and Services vertical, machine sales revenue declined in line with the anticipated slowdown in mining activity, buffered by the uptick in after sales activity, resulting in a marginal decline in Equipment southern Africa revenue of 2% relative to the prior period.

Barloworld said investment in working capital was starting to decrease from the high levels in the 2023 financial year in anticipation of the slow-down in the mining industry.

However, planned deliveries in the second half of the 2023 financial year were still being delivered in the first half of the 2024 financial year.

It also said Equipment Eurasia continued to show strong performance, supported by an excellent performance by Barloworld Mongolia, which delivered revenue growth of 20%, although offset by the 26% reduction in revenue from Vostochnaya Technika.

Meanwhile, Ingrain's revenue declined by 5% against the prior period, impacted by a reduction in sales volumes, and lower customer demand in the alcoholic beverages, papermaking and converting sectors.

Export sales were down due to competitive global pricing of starch, compounded by challenges in the Port of Durban.

Local maize prices were trending downwards and wet weather conditions bode well for maize supply for the 2024 and 2025 calendar years.

This business had commenced a restructure to realign its fixed expenses with lower trading activity to position it to achieve targeted returns in the near future.

Barloworld said it remained focused on value extraction from the investment in this business and was confident that the actions taken would improve the overall business profitability in line with previous guidance.

The group would release a voluntary pre-close update closer to the six-month period ending March 31, 2024.