Barloworld takes a hit of R1bn
Embattled local economy offset by better global mining conditions and record group operating profits
Barloworld took a R1bn foreign exchange hit in the interim period to March 2018, but much better global mining conditions and record operating profit for its automotive business helped fend off the dire SA economy. However, Mark Hodgson, an analyst at Avior Capital Markets, said on Monday that rand strength was “not that serious, especially given recent weakening in the rand that will partly offset this impact”. The group was fixing its logistics business, where in which a loss of contracts, poor acquisitions and exposure to drought-damaged South African sugar volumes had translated into a low-margin business with "too high a cost structure", he said. "Hence very poor returns on capital and management trying to fix the business before they decide whether to sell or retain it," Hodgson said. Barloworld held up its Russian equipment business as the yardstick for returns as global mining markets continued to improve. Russian revenues and operating profit were up 77% and 27%, respective...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.