BWO.L Regulatory News (BWO)

5 Nov 2009 12:01



Barloworld Limited

("Barloworld or the Company")

Trading Statement

Despite the difficult trading environment, Equipment southern Africa delivered a solid operating performance albeit weaker in the second half of the year. The Automotive division performed well in a very difficult year for the industry. The southern Africa Handling and Logistics businesses returned satisfactory results.

In our international operations the depressed economic conditions translated into lower levels of activity impacting both revenue and profit. 

While operating profits are expected to be 20% to 30% lower, basic earnings per share and headline earnings per share (HEPS) from continuing operations are expected to be 40% to 50% lower than the prior year. 

The decline in earnings is mainly attributable to the lower operating profit, restructuring charges to realign our cost base with lower activity levels, adverse fair value adjustments on financial instruments due to the stronger rand and higher finance costs.

Basic earnings per share and headline earnings per share (including both continuing and discontinued operations) are expected to decline by 45% to 55% mainly due to lower earnings from continuing operations and losses incurred in the Scandinavian car rental operations which are disclosed as discontinued.

Operating cash generation has been strong resulting in a further strengthening of the group balance sheet. In addition, improvements were made to the company's debt profile this year. In October 2008 a seven year corporate bond of R750 million was issued in the South African market at a fixed interest rate of 11.67% per annum. The proceeds were utilised to repay short term debt. Subsequently, a R700 million five year loan facility was concluded with a local bank and in September 2009 the UK syndicated facility was renewed ahead of its maturity in 2010, for an amount of £80 million.

This financial information has not been reviewed or reported on by Barloworld's auditors.

Barloworld Limited expects to announce its results for the year to 30 September 2009 on 16 November 2009.

About Barloworld

Barloworld is a distributor of leading international brands providing integrated rental, fleet management, product support and logistics solutions. The core divisions of the group comprise Equipment (earthmoving and power systems), Automotive (car rental, fleet services and motor trading), Handling (forklift truck distribution and fleet management) and Logistics (logistics management and supply chain optimisation).

We offer flexible, value adding, integrated business solutions to our customers backed by leading global brands. 

The brands we represent on behalf of our principals include Caterpillar, Hyster, Avis, Mercedes, Chrysler, BMW, General Motors, Ford, Toyota, Volkswagen, Audi, Nissan, Volvo and others.

Barloworld has a proven track record of effectively managing long-term relationships with global principals and customers. We have an ability to develop and grow businesses in multiple geographies including challenging territories with high growth prospects. One of our core competencies is an ability to leverage systems and best practices across our chosen business segments. As an organisation we are committed to sustainable development and to a leading role in empowerment and transformation 

The company was founded in 1902 and currently has operations in 42 countries around the world with approximately half of our twenty thousand employees in South Africa. 

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