Barloworld CEO Dominic Sewela. Picture: BRETT ELOFF
Barloworld CEO Dominic Sewela. Picture: BRETT ELOFF

Barloworld, which distributes Caterpillar equipment and Volkswagen vehicles, has hiked its interim dividend 13.8% after earnings grew thanks to better equipment sales in Southern Africa.

The group’s results for the six months to end-March were pleasing considering that trading conditions were tough, CEO Dominic Sewela said.

Revenue declined 1.6% to R30.4bn, even though the equipment business in Southern Africa grew sales by 15.7% to R10bn.

“This was driven by increased mining, construction and service activity in SA, together with increased machine and after-market sales in Mozambique and Zambia,” Barloworld said.

Normalised headline earnings per share, a metric that excludes certain once-off charges, rose 14.1%. 

The group raised its interim dividend per share by 13.8% to R1.65.

Barloworld said operating profits fell 4% to R1.9bn due to once-off charges, including costs related to the implementation of its Khula Sizwe BEE transaction.

Meanwhile, the group said its equipment order book in Southern African was unchanged at R2.4bn, “driven by strong demand from contract miners”.

Elsewhere, the outlook for mining activity in Russia “remains positive”. The order book in that market nearly doubled to $83.4m.

“The pipeline for major projects in Russia remains strong,” Barloworld said.

But the group said there are “declining prospects” for growth in SA’s economy.

“It is anticipated that new vehicle sales will remain challenging in the second half, with the premium segment growth expected to be negative for the full period while volume brands provide resilience over the period,” the group said.

Barloworld represents brands such as Caterpillar, Avis, Budget, Mercedes-Benz, Toyota, Volkswagen, Audi, BMW, Ford, and Mazda.

hedleyn@businesslive.co.za