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BAW - Barloworld Limited - Trading update
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Share code: BAW)
(ISIN: ZAE000026639)
("Barloworld or the Company")
TRADING UPDATE
Group results for the first quarter 2011 have improved considerably compared to
the corresponding period last year.
Operating profit in Equipment Southern Africa improved significantly compared to
the first quarter of 2010, due to improved mining, contract mining and after
sale activity. Construction in South Africa remained weak and this is expected
to continue for the year. Activity levels in Mozambique, Namibia and Zambia are
strong, however, Angola continued to be subdued with some recovery anticipated
in the second half of 2011. The firm order book at December was in excess of R4
billion which in US dollar terms is at a historical high.
In November 2010 Caterpillar Inc. announced their intention to acquire Bucyrus
International for $8,6 billion. Caterpillar has indicated that they expect the
transaction to be completed by mid 2011. Once completed, their combined product
range will be vastly enhanced which should give Barloworld the ability to expand
its participation in mining equipment solutions.
The Spanish economy remains weak with little sign of recovery. However, we were
recently awarded a significant machine contract with a large Spanish contractor,
albeit at a lower margin mainly due to a major portion of the package destined
for their international operations. A restructuring charge of Euro4,3 million
(R39 million) has been incurred to realign the expense base with prevailing
activity levels.
Since the announcement in November, all regulatory approvals have been received
in respect of the acquisition of the remaining 50% in the Russian equipment
business. We have consolidated the results of that business from 1 October 2010.
Trading results for the first quarter are better than expected due to a large
delivery of machines in December. The firm order book at December remains
strong and we therefore expect this positive trend to continue.
The Automotive division is experiencing mixed trading conditions. Car rental
rates and volumes remain under pressure while utilisation continues to be well
managed. The unusually high used vehicle profits achieved in the first half of
2010 have normalised. The motor retail operations in Southern Africa experienced
improved new vehicle sales, albeit at lower margins. The Australian operations
continue to show growth. The fleet services business is performing well. The
repayment of the outstanding NOK 150 million (R170 million) in respect of the
disposal of the Scandinavian car rental business was received in full in the
first quarter, bringing the transaction to completion.
Activity levels continue to improve in Handling due to increased sales in all
business units apart from agriculture. Handling in South Africa and The
Netherlands as well as agriculture were profitable in the first quarter and
losses in all other business units are reduced from last year`s levels.
Trading conditions within the Southern African Logistics businesses are
improving as a result of an increase in contract volumes and the addition of new
contracts. However, trading conditions in the other territories remain
difficult. Internationally, the proposed disposal of the African and Asian
Freight Management and Services` non-corporate trader business is proceeding
according to plan and should be completed before the half year. This is below
the JSE transaction thresholds and is for information purposes only.
Net debt levels are expected to increase in the first half of the year following
the acquisition of Equipment Russia for $52 million (R 361 million) together
with associated net debt. Furthermore, we have seen some increase in working
capital in both Equipment Southern Africa as well as our Automotive business in
line with increased activity levels. However, net gearing is expected to remain
well within our target ranges.
Sandton Sponsor:
26th January 2011 J.P. Morgan Equities Ltd.
About Barloworld:
Barloworld is a distributor of leading international brands providing integrated
rental, fleet management, product support and logistics solutions. The core
divisions of the group comprise Equipment (earthmoving and power systems),
Automotive (car rental, motor retail and fleet services), Handling (materials
handling and agriculture) and Logistics (logistics management and supply chain
optimisation). We offer flexible, value adding, integrated business solutions to
our customers backed by leading global brands. The brands we represent on behalf
of our principals include Caterpillar, Hyster, Avis, Audi, BMW, Ford, General
Motors, Mercedes-Benz, Toyota, Volkswagen and others.
Barloworld has a proven track record of long-term relationships with global
principals and customers. We have an ability to develop and grow businesses in
multiple geographies including challenging territories with high growth
prospects. One of our core competencies is an ability to leverage systems and
best practices across our chosen business segments. As an organisation we are
committed to sustainable development and playing a leading role in empowerment
and transformation.
The company was founded in 1902 and currently has operations in 38 countries
around the world with approximately 60% of our eighteen thousand employees in
South Africa.
Corporate information
Registered office and business address
Barloworld Limited, 180 Katherine Street
PO Box 782248, Sandton, 2146, South Africa
Tel: +27 11 445 1000
Email: invest@barloworld.com
Transfer secretaries - South Africa
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg)
Tel: +27 11 630 0000
Registrars - United Kingdom
Equiniti Limited, Aspect House, Spencer Road
Lancing, West Sussex, BN99 6DA, England
Tel: +44 190 383 3381
Transfer secretaries - Namibia
Transfer Secretaries (Proprietary) Limited
(Registration number 93/713)
Shop 8, Kaiser Krone Centre, Post Street Mall
Windhoek, Namibia
(PO Box 2401, Windhoek, Namibia)
Tel: +264 61 227 647
Directors
Non-executive: DB Ntsebeza (Chairman), SAM Baqwa, AGK Hamilton*, S Mkhabela, MJN
Njeke, SS Ntsaluba, TH Nyasulu, G Rodriguez de Castro de los Rios+, SB Pfeiffer#
Executive: CB Thomson (Chief Executive), PJ Blackbeard, PJ Bulterman, M
Laubscher,
OI Shongwe, DG Wilson
*British #American +Spanish
Enquiries: Barloworld Limited: Jacey de Gidts
Tel +27 11 445 1000
E-mail invest@barloworld.com
College Hill: Jacques de Bie, Tel +27 11 447 3030
E-mail Jacques.deBie@collegehill.co.za
For background information visit www.barloworld.com
Date: 26/01/2011 12:30:01 Supplied by www.sharenet.co.za
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