SENS Note - 19 May 2014

  Barloworld interim results 31 March 2014


Revenue for the interim period increased to R29.9 billion (2013: R28.6 billion). EBITDA rose to R2.8 billion (2013: R2.4 billion), operating profit climbed to R1.6 billion (2013: R1.4 billion), while net profit attributable to owners of Barloworld was higher at R1 billion (2013: R609 million). Furthermore, headline earnings per share from continuing operations grew to 316.3cps (2013: 291cps).

Dividend
A dividend of 106cps was declared compared to 96cps last year, an increase of 10%.

Outlook
The global economic recovery now appears to be led by the US and EU while China and the emerging market economies show signs of slowing. The South African economy continues to suffer from the impact of the prolonged strike in the platinum sector which is diminishing growth prospects. Furthermore, high inflation levels would appear to make further interest rate hikes inevitable.

Equipment southern Africa traditionally generates a stronger second half performance which will include deliveries in respect of the major EMPR projects in this period. Aftermarket revenues are expected to generate continued growth. While current economic indicators for Spain are turning positive Barloworld has yet to see this translate into improved machine industry sales. As a result, the group is looking at taking further steps to reduce their cost base and position the business for future profitability. The outlook for Equipment Russia is dependent on no further escalation in tensions between Russia, Ukraine, the EU and the United States.

Trading conditions for Power in southern Africa and Russia will remain muted while Iberia has a solid order book mainly in marine engines which will ensure growth on the prior year. The order books for the Handling and Agriculture businesses in southern Africa are up which should add impetus for the balance of the year.

The group expects the Automotive businesses to show continued growth while the Logistics business should deliver a stronger performance in the second half. Overall the group is expected to produce a solid result for the full year and is well placed to benefit once the global mining cycle moves into a recovery phase.

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