Barloworld FY revenue declined by 7% to R41.9bn

Barloworld, the Industrial Group, recently reported a mixed performance across its business units, with a decline in Equipment Southern Africa and strong growth in Mongolia. The company's CEO, Dominic Sewela, highlighted the increasing geopolitical risks as a primary concern moving forward into 2025. In a recent interview with CNBC Africa, Sewela addressed the challenges posed by geopolitical uncertainties and provided insights into the group's strategies to navigate these risks. Sewela acknowledged the complex geopolitical landscape, citing factors such as the relationship between the US and China, potential tariffs, and the impact on global commodity demand. He also pointed out regional challenges in areas like Angola and Mozambique, where political unrest and oil market instability could affect business operations. Despite these risks, Sewela emphasized the importance of focusing on key business fundamentals, such as maintaining a strong balance sheet and managing costs effectively. The CEO highlighted the company's efforts to strengthen its balance sheet, with a significant reduction in debt and a focus on operational efficiency. He discussed the impact of geopolitical tensions on Barloworld's operations, particularly in regions like Russia, where sanctions have posed challenges. Sewela noted that the company had initiated an independent investigation into potential sanctions violations and emphasized the importance of transparency and compliance in addressing the issue. Regarding a potential buyout deal involving Barlow World, Sewela remained cautious in his response, citing regulatory constraints and governance requirements. He confirmed the appointment of an independent board to oversee the process and pledged to provide further updates as the situation progressed. Sewela also addressed concerns about potential conflicts of interest as the CEO of a company involved in a buyout discussion, emphasizing his commitment to upholding governance standards. Looking ahead, Sewela discussed the company's plans for deploying capital, including a focus on organic growth, potential M&A opportunities, and returning capital to shareholders. He expressed optimism about the construction sector in South Africa and highlighted the government's infrastructure projects as a potential growth opportunity for Barloworld. The CEO cited an increase in the construction order book and noted the positive impact of government investment on the industry. In conclusion, Dominic Sewela's insights shed light on Barloworld's approach to managing geopolitical risks, enhancing financial resilience, and pursuing growth opportunities amidst a challenging global environment. The company's strategic focus on operational efficiency and prudent capital allocation positions it well for future growth and value creation.