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BARLOWORLD LIMITED - Operational trading update

Release Date: 14/02/2019 11:43
Code(s): BAW BAWP     PDF:  
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Operational trading update

Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
("Barloworld” or the “Company" or the “group”)

OPERATIONAL TRADING UPDATE

The group had a positive start in the first quarter of the 2019 financial year despite the
challenging trading conditions in our southern African operations.

Equipment
First quarter activity levels in Equipment southern Africa were well up on last year as a result
of the delivery of the balance of the machine package deal into Mozambique. Margins were
negatively impacted by the higher mix of machine sales. The firm order book at end
December 2018 remains strong and reflects increased activity in the mining and contract
mining sectors.

Barloworld's joint venture in the Katanga province of the Democratic Republic of Congo
continued to generate strong first quarter profits in line with its performance in the latter half
of FY18. Indications are that this momentum will be maintained.

Despite increased import duties and other geopolitical challenges, Equipment Russia’s first
quarter operating performance exceeded our expectations and is only marginally down on
the prior year. Activity levels reflected continued strength in the mining sector. The growth in
the firm order book to December 2018 against September 2018 levels indicates there is
continued momentum in the region.

Automotive
Automotive’s operating result was slightly behind last year with difficult trading conditions
persisting across the automotive industry. Motor Trading’s performance remains resilient as
we continue to focus on optimising the cost base, despite weak demand in the premium
market segment and margin pressures across the represented brands. Avis Fleet has been
impacted by contract delays, however operating margins have shown improvement on the
prior year. Rent a Car was negatively impacted by the decline in foreign inbound segment
over the December 2018 peak trading season.

Logistics
The Logistics division produced a solid result in line with last year’s performance.
Turnaround initiatives continue notwithstanding the headwinds faced particularly in the
transport industry. The sale of the Middle East business is progressing as expected.

Funding

In line with previous years, group working capital and related net debt levels have increased
in the first quarter but we are expecting to reduce these levels over the balance of the 2019
financial year.

The above information has not been reviewed or reported on by the Company’s auditors.

Sandton
14 February 2019

Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited

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