Barloworld reports a 6% increase in revenue

Industrial conglomerate company Barloworld has reported a 6% increase in revenue, despite facing challenges from the global economic underperformance. The company's CEO, Clive Thomson, spoke to CNBC Africa's Fifi Peters about the future growth prospects of Barloworld, particularly in the US economy post Donald Trump's emphasis on infrastructure development. Thomson highlighted the potential indirect benefits of the US economy's growth on global markets and expressed optimism about Barloworld's position to capitalize on these opportunities. The company's strong financial position, with significant cash flow generation and reduced debt levels, sets a solid foundation for both organic growth and acquisitions. One of the noteworthy successes for Barloworld was the strong performance in their Russian operations, despite the country's economic challenges. Thomson attributed this success to robust sales in the gold mining sector and a resilient market for parts and services. The company saw a 51% increase in profitability in Russia and remains optimistic about the country's long-term potential. On the other hand, operations in Spain faced some hurdles due to political uncertainties from inconclusive election results. While the Spanish economy showed positive growth, investments were limited, impacting Barloworld's sales in bigger infrastructure machines. Thomson expressed cautious optimism about the future recovery in Spain, expecting it to take three to five years. Barloworld also took strategic steps to mitigate currency exposure in Angola by investing in dollar-linked bonds to protect against exchange rate losses. The company's joint venture with Beiwa, a German agricultural company, aims to expand their agricultural services offering into the broader value chain, presenting new growth opportunities. Despite the challenges, Barloworld managed to significantly reduce debt levels during the reporting period, positioning the company well for future growth. Thomson reassured stakeholders about the company's comfortable gearing and strong balance sheet to support organic and acquisitive growth. Addressing a question about a business relationship with Optimum Coal, Thomson stated that as long as debts are secured and payments are reliable, Barloworld would consider continuing business with them. Looking ahead, Thomson expressed confidence in the incoming CEO, Dominic Sawella, and the strategic review process in place to drive growth in adjacent markets and new businesses. As Clive Thomson prepares to step down as CEO, he envisions a future for Barloworld fueled by innovation and strategic expansion, under the capable leadership of Dominic Sawella. With a solid financial foundation and a clear growth strategy, Barloworld is poised for continued success and advancement in the global marketplace.