Industrial group Barloworld has reported lower earnings at the halfway stage, as its Russian unit Vostochnaya Technica (VT) continued to weigh on the bottom line.
Group revenue declined 5.8% to R18.1bn for the six months ended March, driven by a 36.8% decrease in revenue at VT and a 6% decline in Barloworld Equipment southern Africa.
Excluding VT, revenue declined 2.2% to R16.8bn. Barloworld Equipment Mongolia continued to deliver robust growth, with a 23% increase in revenue, while Ingrain remained stable compared to the prior period.
Group earnings before interest, tax, depreciation and amortisation (ebitda) declined by 9.1% to R2.2bn and operating profit from core trading activities declined by 14.3%.
Headline earnings per share (HEPS) were down 20.5% to 423.2c. Barloworld declared an interim dividend of 120c per share.
CEO Dominic Sewela said trading conditions were broadly aligned with the group’s expectations of stable to modest economic growth, guarded optimism moderated by ongoing cyclicality and subdued commodity markets.
“Despite challenging market conditions, the Barloworld group has shown remarkable resilience, especially excluding the VT results. The positive impact of the restructuring at Ingrain in 2024 is evident,” he said.
“We continue to navigate the evolving environment by pulling levers within our control, and by exercising focused strategy execution and disciplined capital allocation.”
Looking ahead, Sewela concluded the future effects of tariffs on the group's business remains uncertain, and it is actively assessing the medium- to long-term implications.
Barloworld is under investigation by the US Bureau of Industry and Security for potential export control violations. The group alerted shareholders in September that it had filed an initial notification of voluntary self-disclosure with US authorities, in which it flagged possible export control violations at VT.
VT supplies the full range of CAT and other original equipment manufacturer (OEM) products, including surface earthmoving equipment, underground mining units, parts and after-sales support services.
In the light of the complexities involved, the Bureau of Industry and Security granted an extension of the deadline for Barloworld to complete its investigation and submit a final narrative account of voluntary self-disclosure to June 2. On Monday the group said this had been further extended to September 2.
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