Barloworld reports 21% drop in headline earnings amid Saudi takeover

 Barloworld, which last week announced cleared a last hurdle in its takeover by a consortium of Saudi investors, ahead of its delisting from the JSE, said on Monday that its headline earnings fell in the 12 months to September 30.

Group headline earnings per share (HEPS) fell 21% to 810 cents. Excluding Barloworld Vostochnaya Technica (VT), the loss-making subsidiary in Russia and Caterpillar dealership, group HEPS declined by 14%.

Free cash flow for the industrial processing, distribution, and services group, which has two primary focus areas—industrial equipment and services, and consumer industries (food and ingredient solutions)—reported group revenue lower by 10% to R37.7 billion. Excluding VT, revenue declined by 4.7% compared to the prior period.

Net debt improved by 37% to R884 million, and net asset value per share grew by 5.9% to 141 cents per share. Net profit came to R1.5bn versus R1.95bn last year. No final dividend was declared.

Cash held in Russia amounted to R2.6bn. This cash would be used for operational purposes to settle liabilities. The environment in Russia remained fluid, with sanctions and ongoing uncertainty, Barloworld's directors said.

In the prior year, cash held in Russia was classified as restricted due to remittance limitations and regulatory uncertainty. However, an intra-group restructuring resulting in VT being owned by entities from “friendly” states under Russian law, and based on legal assessments, the cash was no longer considered restricted.

On September 5, 2024, Barloworld submitted an initial notification of voluntary self-disclosure to the US Department of Commerce, Bureau of Industry and Security (BIS) regarding potential export control violations involving its subsidiary VT.

The investigation had been completed, and a final narrative report was submitted to BIS on September 1, 2025. While the investigation did not identify any US sanctions violations by the company, it did identify apparent violations of the US Export Administration Regulations, which the company was addressing. Pending a final resolution of the matter, management was not able to reliably quantify the financial impact of any final determination that the BIS may make and the timing thereof, the directors said.

BUSINESS REPORT