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BAW
BAW
BAW - Barloworld - Trading Update
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Share code: BAW)
(ISIN: ZAE000026639)
("Barloworld or the Company")
TRADING UPDATE
In line with the Company`s Outlook Statement of November 2008, we wish to issue
a Trading Update as follows:
The equipment division in southern Africa continues to experience ongoing demand
in the mining sector, driven mainly by a strong performance in coal and iron
ore, as well as the delivery of back orders, despite some projects being
deferred. Construction demand relating to infrastructure projects is expected
to remain strong in the period leading up to 2010. The power systems business
continues to show growth and is well placed to respond to any increase in
demand. Overall, trading results in the first quarter were well ahead of last
year. However activity levels are expected to slow over the balance of the year.
In Iberia, the Spanish economy continues to deteriorate. The banking sector
remains risk averse, and the measures announced by the Government to stimulate
the economy are only expected to impact business in late 2009 and 2010.
Consequently trading has been negatively impacted and revenue was 35% down in
the first quarter. Significant restructuring and cost reduction plans have been
initiated which should start to have a positive impact in the second half.
In Siberia first quarter trading was ahead of last year assisted by the delivery
of back orders. The slowdown in mining spend and delays on infrastructure
projects will reduce activity levels in the months ahead.
The motor retail business in southern Africa is holding its own in a slowing
market with first quarter results largely in line with the prior year. New
vehicle sales will remain under pressure for 2009. We expect a continuing
improvement in used vehicle profit contribution. The Australian market has
experienced a slowdown in vehicle sales over the past three months. The Avis
Rent a Car operations in southern Africa are experiencing a decline in rental
days partly countered by improved fleet utilisation. The fleet services
business continues to perform well. The process of disposing of the Scandinavian
car rental operations is progressing according to plan but is at an early stage.
The South African handling operations continue to show satisfactory growth and
the agriculture business in South Africa remains strong. Trading conditions have
deteriorated further in the USA and the UK and Europe is also significantly
down. Improvements in the markets are not expected before late 2009. Measures
have been taken to reduce costs and improve efficiency in all businesses.
In the African logistics business trading in the first quarter is ahead of the
prior year. The prevailing economic conditions in Europe and the Middle East are
translating into lower levels of activity for the international logistics
operations, and this is expected to continue throughout 2009.
Post the year end further improvements were made to the company`s debt profile.
A seven year bond was issued in the South African market which raised R750
million at a fixed interest rate of 11.67% per annum. The proceeds were
received on 2 October 2008 and were utilised to repay short term debt.
Subsequently a R700 million, five year loan facility was concluded with a South
African bank.
The global economic environment continues to deteriorate and trading conditions
will be difficult in most of the Barloworld markets and geographies in 2009. We
are taking the necessary steps to cut expenses, reduce capital expenditure and
optimise working capital.
Date:
29 January 2009
Sponsor:
J.P Morgan Equities Ltd.
Date: 29/01/2009 13:30:02 Produced by the JSE SENS Department.
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