Barloworld H1 revenue up 4% as Russia and Europe offset weaker Southern Africa

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Barloworld maintained its interim dividend at R1.15 per share despite headline earnings per share declining 9% to R3.35.

Barloworld, which represents the Avis brand in various countries, said its automotive division contributed 46% of the group's revenue. This division is split into motor trading, which grew sales by 4.6% to R10.3bn; car rental, where sales rose 7% to R2.85bn; and Avis Fleet - which is separate from car rental - where sales fell 3% to R1.6bn.

Equipment sales contributed 43% of the group's revenue. Russian equipment sales rocketed 58% to R2.35bn, European sales were up 21% to R2.25bn while in its home market sales declined 6.9% to R9.24bn.

Measured in dollars, its Russian sales growth was 22% to $157.9m. Its Russian "firm order book" at March was $47.8m, up on the September level of $27.7m, with open-cast gold mining projects driving the growth. "The book also includes an order for our first high wall mining machine in Russia for the coal industry," Barloworld CEO Clive Thomson said in the results statement.

In Europe, sales growth was due to rand depreciation as revenue remained flat at €138.2m. "Following a solid performance in the first quarter, activity levels in Spain have softened as a result of the political impasse arising from the inconclusive results of the general election held in December," Thomson said.

Barloworld's associate in the Katanga province of the Democratic Republic of Congo incurred a loss of R27m in the interim period from the matching period's R110m. This was mainly as a result of a bad debt provision as well as the temporary suspension of mining activities at one of its largest customers from December.

Mining operations at this customer were further disrupted by a slope failure in March, with resumption of mining activities now expected in the second half of Barloworld's financial year, Monday's interim results statement said.

Source: BDpro