Barloworld has written down R1 billion in the value of its assets in its Equipment Eurasia business following Russia’s invasion of Ukraine.
The business – via its subsidiary Vostochnaya Technika - is the official Caterpillar dealer in some parts of Russia. Barloworld has been in Russia since 1998, and the country traditional contributes around 20% of its global revenue. The company says the write-down reflects, in part, "lower estimated cash flows".
Barloworld previously said it will continue to trade in Russia, despite a mass exodus of other international groups amid sanctions and the fear of reputational damage of staying in the country.
In the past six months to end-March, Equipment Eurasia grew its revenue by 11.8% to R5.7 billion thanks to "buoyant" mining activity and "excellent growth" in aftermarket revenue in Russia. This was offset by lower revenue generated from Mongolia due to supply chain challenges on the border of Mongolia and China, which was hit by a lockdown.
"This resulted in machine inventory being stuck at the border, unable to be shipped and sold to customers."
Barloworld reported on Monday that its interim revenue from continuing operations increased by 14%, while its "normalised" headline earnings more than doubled and its interim dividend rose from 137c to 165c.
Its equipment business in southern Africa saw revenue grew by 7.7% to R9.4 billion driven largely by machine sales and rentals.
The group reported that "significant" progress in preparing its car rental business Avis Budget Southern Africa to operate on standalone basis – the company wants to exit the business and both a sale and separate listing via an unbundling are being investigated.
"To date, the board has not deemed any of the approaches made to acquire the business as having sufficient merit to be progressed."
Ingrain’s revenue grew by 10.7%. boosted by an increase in demand from the confectionery and paper making sectors, while alcoholic beverage sales remained strong. The business produces unmodified and modified starch, glucose and related products.