In a five-month trading update published on Tuesday, JSE-listed Barloworld says the performance of the group’s Mongolia business managed to somewhat counteract the contraction of its Equipment Southern Africa and Vostochnaya Technica (VT) divisions.

Barloworld’s Ingrain business also saw a “significant improvement in operational results” following the rollout of a turnaround plan.

VT was the Caterpillar dealer in Russia, but had been scaled down in reaction to the sanctions imposed on this country following its invasion of Ukraine.

No new inventory had been ordered since July, last year, reported Barloworld in a conference call, with the company now focused on trading its legacy inventory to the limited number of customers it was allowed to trade with, while also servicing the equipment already on the ground.

In the first five months of the 2025 financial year, Barloworld generated R14.8-billion in revenue – 4.9% below the comparative five months of the prior financial year.

Operating profit from core trading activities declined by 20.5%, from R1.3-billion to R1.1-billion.

Within the Industrial Equipment and Services cluster, Industrial Equipment comprises Equipment Southern Africa and Barloworld Mongolia (as Caterpillar equipment distributors), as well as Industrial Services, which comprises VT.

Barloworld said Equipment Southern Africa’s results were indicative of the slow recovery in the mining sector and the disruption caused by the unrest in Mozambique following the elections in that country.

“Mining customers continue to take a cautious approach to capital re-investment, whilst the construction industry recovery has not fully gained momentum,” the company said in a statement.

Operating profit after fair value adjustments declined by 16.4%, from R688.5-million to R575.8-million.

The order book for this business had, however, increased by 13%, from R3-billion as reported in the prior period, to R3.4-billion as at the end of February.

Barloworld Mongolia generated strong revenue growth, noted the company, with operating profit up 26.7% to $22.6-million.

The order book had, however, shrunk substantially, from $117.8-million in the prior period to $27.8-million, following significant product deliveries since February last year to date.

VT's revenue of $60.6-million was 25.3% lower when compared with the prior period, impacted by lower activity levels.

Operating profit from core trading activities of $1.5-million was 91% lower than the prior period.

VT remained self-sufficient in terms of its funding requirements, said Barloworld.

“The independent investigation into potential export control violations is ongoing,” the company added.

“In light of the complexities involved in the investigation, the US’s Bureau of Industry and Security (BIS) has granted an extension of the deadline for the company to complete its investigation and submit a final narrative account of voluntary self-disclosure, to 2 June.”

Concurrent with the ongoing BIS investigation, Barloworld said it continued “to review various options” in respect of its investment in VT.

Agricultural and food-and-beverage-related business Ingrain saw operating profit growth of 15.5%, to R232.4-million.

Barloworld confirmed that the overall group strategy of fix, optimise and grow remained unchanged.

* In February, Barloworld shareholders rejected a proposed R23-billion buyout offer from a consortium led by management (including CEO Dominic Sewela) and the Saudi Arabian Zahid Group.