JSE-listed Barloworld’s group revenue for the six months ended March 31 declined by 5.8% to R18.1-billion, driven by a 36.8% decrease in revenue at its Russian operation Vostochnaya Technica (VT) and a 6% decline in Barloworld Equipment Southern Africa.

Excluding VT, revenue declined by 2.2% to R16.8-billion.

VT revenue declined by 34.8% from $105.6-million to $68.9-million, impacted by lower activity levels following the curtailed inventory supply and the reducing addressable market owing to the evolving sanctions 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 US Department of Commerce, Bureau of Industry and Security has granted an extension of the submission date from June 2 to September 2.

“The future effects of tariffs on our business remain 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,” Barloworld Group CEO Dominic Sewela points out. 

Meanwhile, Barloworld Equipment Southern Africa’s total revenue declined by 6% to R11-billion from R11.8-billion year-on-year, impacted by the stronger rand against the dollar and reduced parts sales.

While total machine sales were flat compared with the prior year, growth in used equipment sales and rentals supported overall volumes. The earnings before interest, taxes, depreciation and amortisation (Ebitda) margin remained steady at 11.5%, compared with 11.6% in March 2024.

Barloworld Equipment Mongolia continued to deliver robust growth, with a 23% increase in revenue, while Ingrain remained stable compared with the prior period, the group points out.

Sewela says 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,” he avers.

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 the Ebitda margin expanded to 12.5%, the group points out.

Barloworld has declared an interim ordinary dividend a share of 120c in line with the group’s dividend policy. 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, the group explains.

The group has largely completed its strategic exit from noncore businesses, refining its focus on two primary verticals – Industrial Equipment and Services and Consumer Industries.