Swakop Uranium bolsters Barloworld’s equipment division
“Our Equipment business in southern Africa delivered a good overall result despite the ongoing challenges in the mining sector. Revenues were bolstered by a strong performance from the Extended Mining Product Range and continued aftermarket growth,” said Barloworld in a release distributed through the stock exchange news service.
Overall, the group is expected to produce a solid result for the full year and is well placed to benefit from improved trading conditions once the global mining cycle moves into a recovery phase.
Group revenue from continuing operations to March 2014 of N$29.9 billion was 5% up on 2013. Barloworld reported an operating profit of N$1.6 billion, an 18% increase ahead of the figure reported in 2013. This resulted in an improved operating margin of 5.5% for the six months, according to the statement.
The group generated total headline earnings per share of 336 cents including 20 cents from discontinued operations which exceeded the prior year by 10%.
Said Barloworld, “As reported in our outlook at the end of last year, mining in southern Africa remains challenging with the major mining companies continuing to cut or defer capital expenditure. However, we continue to service the large existing population of Caterpillar equipment which has led to ongoing growth in our aftermarket revenues.”
The division generated revenue to March of N$9.6 billion compared to N$9 billion in the prior year. The bulk of the increase came from the extended mining product range which increased current year revenue by N$391 million driven by deliveries to Swakop Uranium in Namibia and First Quantum Minerals in Zambia, together with a rise in after-sales revenues.
Operating profit to March of N$768 million exceeded the prior year by N$114 million, up 17% with an improved operating margin of 8% compared to 7.2% in 2013.
The firm order book at March 2014 stood at N$2.8 billion which was below the September reported level of N$3.5 billion following the commencement of deliveries to Swakop Uranium and the FQM Kulumbila projects. Contract mining activity however increased of late with a number of projects awaiting confirmation. Income from associates for the first half increased by 51%, Barloworld reported.
In Namibia, Barloworld operates car rental agency Avis, and is the sole distributor of Massey-Ferguson tractors and Caterpillar equipment. In 2012, Barloworld secured a contract in excess of US$130 million from Swakop Uranium.