“The Automotive and Logistics division traded strongly with all business units performing well ahead of the prior year,” said Clive Thomson, chief executive of [DATA BAW:Barloworld Limited], the global industrial company, in a statement.
For the six months ended 31 March 2014, group revenue increased by five per cent to 29.9 billion rand while operating profit was up 18 per cent to 1.6 billion rand due to a substantial profit increase in its automotive and logistics division.
The division generated revenue of 15.1 billion rand, an 11 per cent increase from 2013, while operating profit rose 26 per cent to 775 million rand, due to an improved performance in each of the division’s operations, car rental, motor retail, fleet services and logistics.
The division also sold its Australian motor retail operation, the Ferntree Gully dealership, in November 2013, for 1.3 billion rand.
(READ MORE: Barloworld disposes of Australian motor interest)
Its Southern African based equipment business also performed well for the period, with revenue increased from 9 billion rand in 2013 to 9.6 billion rand this year, boosted by sales in their extended mining product range (EMPR).
“Our equipment business in southern Africa delivered a good overall result despite the ongoing challenges in the mining sector. Revenues were bolstered by a strong performance from EMPR and continued aftermarket growth,” explained Thomson.
(WATCH VIDEO: Barloworld grows depsite mining slowdown)
Operating profit for the division also rose by 17 per cent to 768 million rand, however the division’s branches in Russia and Liberia performed poorly, affecting the division’s earnings for the period.
“In Russia our business held up relatively well despite slowing economic growth and political uncertainty arising from the Ukraine crisis,” he added.
Their Liberian branch’s revenue fell from 2.4 billion rand to 2.2 billion rand due to the country’s weak construction sector, while their Russian division’s revenue declined 11.8 per cent to 1.9 billion rand due to lower mining sales.
Barloworld’s total headline earnings per share however rose by 10 per cent to 336 cents while earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 17 per cent to 2.8 billion rand.
(READ MORE: Barloworld delivers impressive revenue growth)
A dividend of 106 cents per share was declared compared to 96 cents last year, an increase of 10 per cent.
Barloworld expects that their automotive and logistics businesses will continue to perform well and that the overall group earnings will increase once the global mining industry begins to recover.
“Overall the group is expected to produce a solid result for the full year and is well placed to benefit once the global mining cycle moves into a recovery phase,” concluded Thomson.