Barloworld half-year HEPS declines 8%

Balleweld, a leading industrial company, has recently reported a decline in revenue of 8% for the half-year, impacting their headline earnings per share. The CEO, Dominic Sewela, discussed the results and the company's future plans in an interview with CNBC Africa. The drop in revenues and earnings has been attributed to various challenges, particularly in Southern Africa where the equipment sector experienced a significant 10% decline in revenue. Sewela mentioned that the mining sector, which is a major customer base for Balleweld, has been cautious in purchasing new machinery due to economic uncertainties and geopolitical issues beyond the company's control. One of the key challenges highlighted by Sewela was the impact of the upcoming elections in South Africa. He expressed hope that the new government, regardless of the election outcome, would focus on infrastructure development, which is crucial for Balleweld's business. Infrastructure projects such as road and dam construction play a significant role in driving demand for Balleweld's equipment and services. Despite the challenges faced in Southern Africa, there were bright spots for Balleweld in other regions such as Mongolia. Sewela explained that Mongolia's strategic location between China and Russia, along with its abundant natural resources, has driven demand for Balleweld's products in the region. The investment in rail and road infrastructure in Mongolia, coupled with China's energy needs, has created a positive growth trajectory for Balleweld's operations in the country. Looking ahead, Sewela remains cautiously optimistic about Balleweld's performance in the second half of the year. He emphasized the importance of efficiency improvements in their operations, particularly in South Africa, where cost-saving measures and investments in plant efficiency are expected to yield positive results. Sewela also highlighted the potential impact of weather patterns like La Nina on their agricultural business, indicating that procurement strategies are in place to mitigate any potential adverse effects. In conclusion, Balleweld faces challenges in navigating the tough economic environment in South Africa and other regions where they operate. The company's focus on operational efficiencies, strategic investments, and diversification across different geographies will be crucial in driving future growth and resilience in the face of external uncertainties.