Barloworld CEO Dominic Sewela
JSE-listed industrial group Barloworld has implemented austerity measures to reduce costs and conserve cash to mitigate the impact of Covid-19 across the company’s operations, with help from a crisis committee that has been set up.
While the company’s diversified portfolio has resulted in minimal disruptions in its supply chain so far, the situation is changing rapidly, says Barloworld.
“Commodity prices and our key market economies are being impacted. We are keeping close to our customers to understand the impact of this pandemic on their liquidity and continuity of operations.”
A strong balance sheet remains a key strength for the group during this time. The company has committed funding of R7.2-billion.
CEO Dominic Sewela predicts that the tough trading conditions will intensify in the second half of the 2020 financial year.
Notwithstanding the tough trading conditions, Barloworld has made progress on its growth strategy.
The rollout of Barloworld Business System (BBS) is progressing well across the group. Sewela believes BBS will enhance business value and create a platform for integrating businesses.
Further, the company has always aimed to double the intrinsic value of the company every four years.
In terms of acquisitive growth, Barloword is pursuing growth into markets identified based on a clear set of investment guardrails, including industry attractiveness and the company’s ability to win existing, adjacent and new business.
“We continue to consider a healthy pipeline of inorganic growth opportunities in Africa but will be disciplined and circumspect in the decisions with due consideration to the challenging macroeconomic environment,” Sewela says.
Meanwhile, the company’s Wagner Asia transaction should have closed on April 1, but the long stop date has been moved to October 31, while the company’s Tongaat Hulett Starch acquisition should close in the fourth quarter of the year.