Barloworld today released results for the six months ended 31 March 2025. The group’s revenue declined by 5,8% to R18,1-billion, driven by a 36,8% decrease in revenue at Vostochnaya Technica (VT) and a 6,% decline in Barloworld Equipment southern Africa. Excluding VT, revenue declined by 2,2% to R16,8-billion. Barloworld Equipment Mongolia continued to deliver robust growth, with a 23% increase in revenue, while Ingrain remained stable compared to the prior period.
Barloworld Group CEO, Dominic Sewela, states that trading conditions for the six months were broadly aligned with the group’s expectations of stable to modest economic growth, guarded optimism moderated by ongoing cyclicality and subdued commodity markets.
“Despite challenging market conditions, the Barloworld group has shown remarkable resilience, especially excluding the VT results. The positive impact of the restructuring at Ingrain in 2024 is evident. We continue to navigate the evolving environment by pulling levers within our control, and by exercising focused strategy execution and disciplined capital allocation.”
Group EBITDA declined by 9,1% to R2,2-billion and operating profit from core trading activities declined by 14,3% to R1,6-billion. However, excluding VT, EBITDA grew by 3% and EBITDA margin expanding to 12,5%.
The Board has declared an interim ordinary dividend per share of 120 cents in line with the group’s dividend policy (2,5 to 3,0 times normalised HEPS excluding the operations in VT), the dividend is at the higher end of the dividend cover, and represents a 43% reduction from the prior period, reflecting a prudent stance amid ongoing uncertainty.
Operational performance
The group has largely completed its strategic exit from non-core businesses, refining its focus on two primary verticals: Industrial Equipment and Services and Consumer Industries.
Industrial Equipment and Services
Barloworld Equipment southern Africa
Total revenue declined by 6% to R11-billion (March 2024: R11,8-billion), impacted by the stronger Rand against the Dollar and reduced parts sales. While total machine sales were flat compared to the prior year, growth used equipment sales and rentals supported overall volumes. EBITDA margin remained steady at 11,5% (March 2024: 11,6%).
Barloworld Mongolia
Barloworld Mongolia continued to deliver strong results on the back of aftermarket and prime product growth. Revenue increased by 27,8% from US$103,1-million to US$131,8-million due to 44% aftermarket growth and a 28% increase in prime product sales. The business generated EBITDA of US$30-million, 20% growth when compared to the prior period. EBITDA margin ended at 23,1% relative to 24,7% for the prior period.
Vostochnaya Technica (VT)
Revenue declined by 34,8% from US$105,6-million to USS$68,9-million impacted by lower activity levels following the curtailed inventory supply and the reducing addressable market due to the evolving sanction regime.
The group expects VT to operate at breakeven levels and to remain self-funding. An independent investigation into potential export control violations is ongoing, and the group announced that the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) has granted an extension of the submission date from 2 June 2025 to 2 September 2025.
Consumer Industries – Ingrain
The 2024 optimisation actions at Ingrain are yielding the desired benefits, resulting in a lower fixed cost base and improved operating efficiencies. Ingrain generated stable revenue, with lower overall volumes offset by inflationary price increases. The division reported a healthy EBITDA growth of 10,1% year on year.
Outlook
Sewela concludes: “The future effects of tariffs on our business remains uncertain, and we are actively assessing the medium- to long-term implications thereof.
“That said, we have consistently demonstrated our ability to successfully navigate volatility in the past by leveraging our key endowments and having a firm grip on what we can control.”
