The Barloworld Group says it has produced a strong result for the twelve months ended 30 September 2018, particularly on the back of robust earnings growth in Equipment Russia and the turnaround of the Logistics business.
“Investors are referred to the SENS announcement released on 25 April 2018 relating to the finalisation of negotiations for the sale of the Equipment Iberia business.
This disposal was concluded in July 2018 with the sale price representing a premium to net asset value. The results of these operations have been presented as discontinued operations. The commentary below is regarding continuing operations, unless otherwise stated,” reads a Barloworld trading statement issued on the Namibian Stock Exchange.
Headline earnings per share (HEPS)/Earnings per share (EPS) guidance Barloworld expects HEPS from continuing operations for year ended 30 September 2018 to be between 13%-23% higher than the reported HEPS from continuing operations for the previous year ended 30 September 2017 of 974.5 cents. This translates to an expected HEPS from continuing operations range of between 1,101.2 cents and 1,198.6 cents for the period.
The company expects HEPS, including both continuing and discontinued operations, for the year ended 30 September 2018 to be between 30%-40% higher than the reported HEPS for the previous year ended 30 September 2017 of 883.4 cents. This translates to an expected HEPS range of between 1,148.4 cents and 1,236.8 cents for the period.
The company expects EPS from continuing operations for the year ended 30 September 2018 to be between 10%-20% higher than the reported EPS from continuing operations for the previous year ended 30 September 2017 of 907.2 cents. This translates to an expected EPS from continuing operations range of between 997.9 cents and 1,088.6 cents for the period.
Barloworld expects EPS, including both continuing and discontinued operations, for year ended 30 September 2018 to be between 30%-40% higher than the reported EPS for the previous year ended 30 September 2017 of 779.6 cents. This translates to an expected EPS range of between 1,013.5 cents and 1,091.4 cents for the period.
“Equipment Russia produced record US$ revenue and operating profit as a result of strongly improved mining activity, specifically the delivery of large mining machine orders contracted at the end of 2017.
Equipment southern Africa produced a solid operating performance also driven by increased mining activity,” reads the statement.
The group´s joint venture in the Katanga province of the Democratic Republic of Congo delivered greatly improved earnings on the back of buoyant copper and cobalt demand.
The Automotive division produced a good result in challenging market conditions.
Revenues were negatively impacted by the sale and closure of a number of BMW and GM dealerships in the latter part of FY2017.
Whilst lower activity levels and lost contracts have reduced revenues in Logistics, the success of operational and cost initiatives implemented towards the end of 2017 have substantially improved the operating performance of this business.
Net debt at year end is well down on the prior year mainly as a result of the proceeds from the sale of Equipment Iberia. Group working capital increased as a result of higher inventories and receivables in the Equipment businesses.
In October 2018 Barloworld repaid Bond BAW 11 of R460 million utilising cash on deposit.
Overall debt maturity is well balanced into future years.
The group’s results for the year ended 30 September 2018 are scheduled to be released on SENS on or about 19 November 2018.