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UPDATE 1-S.Africa's Barloworld sees up to 50 pct rise in profit
November 7, 2012 / 12:10 PM / in 5 years

UPDATE 1-S.Africa's Barloworld sees up to 50 pct rise in profit

* Southern Africa, Russia equipment unit robust

* Shares up nearly 2 percent, outpace index

JOHANNESBURG, Nov 7 (Reuters) - South African industrial group Barloworld Ltd said on Wednesday full-year profit likely rose as much as 50 percent, lifted by buoyant demand for mining equipment in southern Africa and Russia.

Barloworld, the biggest dealer of Caterpillar earth-moving equipment in southern Africa, said it delivered record sales of heavy-duty machines to mining companies in the region.

The company, which also operates in Russia, Iberia and several African countries such as coal and gas-rich Mozambique, said its Russian business delivered a strong performance, although its Iberian unit suffered due to an economic slowdown in Spain.

“We saw good demand for mining equipment in countries such as Mozambique, Angola and South Africa,” said Ian Stevens, Barloworld financial director said.

The company said in a statement that headline earnings per share for the year to September likely rose as much as 50 percent from the 465 cents it reported a year earlier.

Headline EPS, the main measure of profit in South Africa, excludes certain one-time items.

Shares in the company, which are little changed so far this year, rose 1.9 percent to 74 rand, outpacing a flat JSE All-share index.

Demand for industrial equipment has increased in southern Africa countries such as Mozambique, where enough gas to supply Germany, Britain, France and Italy for 13 years was discovered recently.

For Barloworld, that has helped offset weak demand in South Africa’s platinum industry, which is weighed down by wildcat strikes, soaring costs, lower white metal prices.

Barloworld said its auto dealership unit also produced “good results” as decades-low interest rates in South Africa boost demand for cars while its logistic unit also delivered a performance “well ahead of last year”.

The company, which sold its UK and U.S. forklift businesses for a total of $120 million this fiscal year, said profit likely rose by as much as 58 percent if the proceeds from the sale of the businesses were included.

Barloworld is due to report its results on Nov. 19.

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