Press releases

Barloworld's half-year performance supported by Strong results from Mongolia

27 May 2024

Results reflect the diverse economic environments in which the group operates

Key financial update:

  • Dividend increased by 5% to 210 cents per share
  • HEPS at 532.2 cents declined by 8%
  • Net Asset Value per share increased by 9%
  • Revenue at R19.2 billion declined by 8%
  • EBITDA margin maintained at 12.9%
  • Gross debt reduced by 31%
  • Net working capital reduced by 48%
  • ROIC above target hurdle rate at 14.3%

Johannesburg – Barloworld (JSE code: BAW) today released results for the six months ended 31 March 2024.

"Our results bear testament to the resilience of our businesses and the benefit of geographic diversification of the overall portfolio." Barloworld Group Chief Executive Officer, Dominic Sewela, said that while the businesses in South Africa faced a myriad of challenging trading conditions, the Mongolian business benefited from the favourable tailwinds in the Mongolian economy during the first half of the 2024 financial year.

"Our South African operations have had to contend with the constrained local macroeconomic environment, with inflationary cost pressures as well as the relatively higher borrowing costs affecting both businesses and households."

He added that while the group had anticipated a slowdown in local mining activity, the effect of South Africa's rail and port bottlenecks and the resultant parking of large equipment by its major mining customers had created additional pressures on the performance of the South African equipment business in the first six months.

Operational performance

The group's revenue of R19.2 billion decreased by 8% compared to prior period, driven by a 10% decrease in Equipment southern Africa, 3% decrease in Ingrain. Equipment Eurasia's performance was largely supported by a 43% growth in revenue from Barloworld Mongolia.

While earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 8% to
R2.5 billion, the business maintained its EBITDA margin at 12.9%.  Operating profit from core trading activities declined by 12% to R1.9 billion.

Mr Sewela also noted that the group continued to allocate capital to projects that yielded returns higher than the cost of capital, thereafter paying down debt and distributing cash to shareholders as part of its ongoing efforts to maximise shareholder value. "In line with our plans, we succeeded in paying down debt in the first half of the year, which resulted in a 31% reduction in gross debt, or a R3.3 billion debt repayment."

Headline earnings per share declined by 8% to 532.2 cents while the Net Asset Value per share increased by 9% to 9111 cents in March 2024.

Return on invested capital (ROIC), the group's key measure, at 14.3%, remains higher than the 14% target hurdle rate.

Mr Sewela announced the board's decision to declare an ordinary dividend per share of 210 cents which is 5% higher than the prior period. This is in line with the group's stated dividend policy cover of 2 .5 to 3.0 times normalised headline earnings.

Equipment southern Africa

Equipment southern Africa revenue decreased by 10% to R11.8 billion, driven by lower machine sales revenue, which declined by 25%. This was partially offset by the 6.7% increase in parts sales. Operating profit from core trading activities (before fair value adjustments) ended at R1.1 billion, an 8% decline from the prior period mainly as a result of input cost pressures, the weakness of the ZAR and the slowdown in mining activity. The division achieved an EBITDA of R1.4 billion.

Equipment Eurasia

Eurasia had a strong first half, supported by a strong performance in Mongolia. The division generated revenue of R3.9 billion, 1% lower than the prior period due to a 24% decrease in Vostochnaya Technica's (VT) revenue, offset by 43% growth in Barloworld Mongolia's revenue. The division generated R815.0 million in operating profit from core trading activities, representing a 19.1% increase when compared to the prior period. EBITDA ended at R896 million for the current period.

Consumer Industries

During the period under review, Ingrain's revenue decreased by 3.3% to R3.2 billion. This was attributable to a 4.6% decrease in volumes, which effects were partially offset by average price increases of 1.4%. Operating profit from core trading activities of R234 million declined by 29.6% relative to the prior period, and the division generated an EBITDA of R372 million.

Ingrain has concluded the restructuring process. This will result in a lower fixed cost base, internal efficiencies and better resource allocation across the operations going forward.

Progress on strategy

In commenting on the group's Fix, Optimise and Grow strategy, Mr Sewela confirmed that the strategy remains relevant as Barloworld continues to use its strategic levers to optimise its existing businesses and ensure that the portfolio achieves its full potential.  

He added that while the group is addressing operational inefficiencies through the respective business plans, each business has the proven resilience to navigate the current business environment.


Mr Sewela said that Barloworld remains focused on building a sustainable future and continues to prioritise creating and delivering value to all stakeholders. He added that the current challenging macroeconomic environment is expected to linger for the remainder of the 2024 financial year, with some potential for easing in the latter part of 2025

He cautioned that there is still the risk of geopolitical conflict-driven disruptions which could result in protracted global inflationary pressures and supply chain interruptions.   

Mr Sewela commented that despite the expected headwinds presented by the local macroeconomic environment, Barloworld continues to focus on the strategic levers it can control and to respond to market changes and the challenges and opportunities they present with agility and discipline.