Barloworld, the international heavy equipment and vehicle distribution group, said on Friday that its financial results from its businesses were “pleasing” in the four months to January 31.
The group said in a trading statement that the Industrial Equipment and Consumer industries verticals traded well despite operating challenges in its Eurasia division.
“Favourable group revenue growth has been achieved as a result of better trading performance in Equipment southern Africa, Equipment Mongolia and Ingrain,” the group said.
The car rental and leasing business, Zeda, was unbundled and separately listed on the JSE on December 13, 2022, and its assets and liabilities had been de-consolidated from the group financial statements.
Equipment Southern Africa saw stronger turnover on the back of high demand in the mining sector across all its regions.
“Machine sales growth has been exceptional... Due to the strong machine sales mix, the operating margin is tracking slightly lower than the comparative prior period for the four months to 31 January, 2022.”
The order book remained strong at levels higher than September 2022.
Bartrac, the joint venture in Democratic Republic of Congo, showed a resilient performance and posted profits.
“The business is expected to maintain the same trajectory for the rest of the financial year,” the group said.
Equipment Eurasia had a strong start supported by a better-than-expected result in Russia and a good performance in Mongolia.
The war in Ukraine affected the business in Russia, and with a reduced product line and a constrained supply chain, results were down from the prior period’s record results, but were “much better than expected.”
The business made progress in restructuring the cost base in line with existing trading levels.
Mongolia experienced a good start to the financial year with good prime product sales, supported by the continued positive impact of the opening of the China borders. Aftermarket demand remained solid and as a result the business managed to record a good operating result.
The Mongolian results were expected to be better than the prior year on all key metrics, with a better-than-expected contribution from Russia on the operating and ROIC return metric.
In the consumer industries operations, Ingrain saw strong revenue growth with earnings before interest tax and depreciation allowances at similar levels to the prior period. Sales volumes were relatively flat year-on-year, with growth in export volumes offset by marginally lower domestic sales volumes.
BUSINESS REPORT