JOHANNESBURG (Reuters) - South African industrial group Barloworld expects Chinese and Russian demand for resources to underpin growth for equipment such as forklifts and trucks, its chief executive told Reuters in an interview.
Worries about slowing demand from the world's second-largest economy have hit commodities and led miners to defer spending plans.
Yet Clive Thompson, head of the $2.3 billion equipment supply company, said such fears may be overblown.
"Chinese demand has moderated and that has led to a pullback in some commodity prices in recent months, but I do think the long-term fundamentals remain solid," he said.
Barloworld on Monday posted a 70 percent rise in first-half profit, lifted by strong demand from miners, particularly in Russia. "In Russia, the strong activity levels experienced in the first half are expected to be exceeded in the second half.
This is underpinned by ... continued demand for commodities and a growing domestic economy," the company said.
Shares in Barloworld, the biggest supplier of Caterpillar equipment in southern Africa, have dropped nearly 20 percent since early April, hit by nagging worries about a slowdown in China.
The Chinese economy grew by 8.1 percent in the first quarter, its slowest pace of growth in almost three years. "China's 8 percent growth is still faster than any of the big economies out there and should support demand for commodities," said Abri du Plessis, chief investment officer at Gryphon Asset Management in Cape Town.
The shares, up 8 percent this year despite the recent sell-off, gained 1.41 percent to 82.47 rand on Monday, outperforming Johannesburg's All-share index, which was flat. Investors watch Barloworld's performance carefully as it is seen as a proxy for the broader mining industry, which buys its trucks and loaders.
Thompson said the company has pushed back its expectations for a recovery in Spain by at least a year due to the euro zone debt crisis. "We are sort of flat to moderately up, that's what we're saying for 2013 in Spain.
It's probably 2014 that we are going to see any meaningful recovery," he said. First-half revenue rose 19 percent to 28.1 billion rand and the company lifted its interim dividend by 60 percent to 80 cents per share.
Diluted headline earnings per share totalled 243.1 cents in the six months to end-March, versus 143.5 cents a year earlier.
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Worries about slowing demand from the world's second-largest economy have hit commodities and led miners to defer spending plans.
Yet Clive Thompson, head of the $2.3 billion equipment supply company, said such fears may be overblown.
"Chinese demand has moderated and that has led to a pullback in some commodity prices in recent months, but I do think the long-term fundamentals remain solid," he said.
Barloworld on Monday posted a 70 percent rise in first-half profit, lifted by strong demand from miners, particularly in Russia. "In Russia, the strong activity levels experienced in the first half are expected to be exceeded in the second half.
This is underpinned by ... continued demand for commodities and a growing domestic economy," the company said.
Shares in Barloworld, the biggest supplier of Caterpillar equipment in southern Africa, have dropped nearly 20 percent since early April, hit by nagging worries about a slowdown in China.
The Chinese economy grew by 8.1 percent in the first quarter, its slowest pace of growth in almost three years. "China's 8 percent growth is still faster than any of the big economies out there and should support demand for commodities," said Abri du Plessis, chief investment officer at Gryphon Asset Management in Cape Town.
The shares, up 8 percent this year despite the recent sell-off, gained 1.41 percent to 82.47 rand on Monday, outperforming Johannesburg's All-share index, which was flat. Investors watch Barloworld's performance carefully as it is seen as a proxy for the broader mining industry, which buys its trucks and loaders.
Thompson said the company has pushed back its expectations for a recovery in Spain by at least a year due to the euro zone debt crisis. "We are sort of flat to moderately up, that's what we're saying for 2013 in Spain.
It's probably 2014 that we are going to see any meaningful recovery," he said. First-half revenue rose 19 percent to 28.1 billion rand and the company lifted its interim dividend by 60 percent to 80 cents per share.
Diluted headline earnings per share totalled 243.1 cents in the six months to end-March, versus 143.5 cents a year earlier.
yahoo.com
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