Barloworld Limited

For the year ended September 2024, Barloworld reported revenue of ZAR41.9 billion, down 7% year on year. Management said EBITDA margin was maintained at 12.2%, operating profit margin was 9% versus 9.6% last year, and reported HEPS was ZAR10.22 per share, down 12%; on a normalized basis, EBITDA rose 9%, operating profit from core trading activities rose 3%, ROIC was 19% (up 2.3 percentage points), ROE was 15.5%, and normalized HEPS was ZAR13.98, up 21%. Gross debt was reduced by 29%, floorplans were down 27%, net finance cost fell 5.3%, and the UK pension fund was fully settled with a final payment of GBP27.2 million / ZAR632 million. Forward, management said Equipment Southern Africa mining conditions should stay subdued through most of 2025, construction is improving, Mongolia should still grow but at a slower pace, Russia activity will be curtailed by sanctions, and Ingrain expects benefits from supply-chain improvements over the next 18-24 months.

Dominic Sewela framed 2024 as evidence that Barloworld’s fixed-and-optimized growth strategy is working despite a difficult operating backdrop. He emphasized portfolio diversification, BBS execution, and capital discipline, pointing to lower debt, the pension settlement, and returns that remain above the cost of capital. His tone was confident but cautious, repeatedly noting geopolitical, cyclical, and regulatory headwinds for 2025.

Nopasika Lila focused on normalized performance and balance-sheet strength. She highlighted EBITDA up 9%, operating profit from core trading up 3%, ROIC at 19%, ROE at 15.5%, and normalized HEPS at ZAR13.98, while also noting two non-recurring items: a $10 million Mongolia earnout and $26.7 million of VT provisions. She said gross debt fell 29%, floorplans fell 27%, net finance cost declined 5.3%, and the group ended with assets exceeding liabilities by ZAR16.7 billion; she also reiterated the dividend of ZAR3.10 per share for a total of ZAR5.20, up 4% year on year.

Analysts asked about the potential consortium offer for all issued shares, and management declined to comment beyond the existing cautionary, saying any update would come through an updated cautionary if needed. On VT export-control concerns, Dominic Sewela said an independent investigator has been appointed, the review is ongoing, and it is too early to provide details before the report is submitted to BIS by 3 March 2025. Questions on 2025 outlook drew a cautious response: Equipment Southern Africa expects mining to remain weak, Bartrac depends on customer project timing and regulation, Mongolia should still grow but at a slower pace, and Ingrain sees margin support from better supply-chain planning and stock availability over 18-24 months.