Barloworld Q1 earnings hurt by low equipment demand

Barloworld said a decline in mining equipment demand has affected its business negatively, sending its shares down 7 percent.

Barloworld, the biggest dealer of Caterpillar mining trucks in Southern Africa, said trade in equipment over the first quarter had declined compared with the previous year due to continued weakness in commodity markets.

"Reductions in capital expenditure and production cutbacks have negatively affected equipment demand from mining companies and contract miners," the group said.

Barloworld's trading in Angola has also slowed due to the declining oil price and currency devaluations. Meanwhile its biggest client, Katanga Province in the Democratic Republic of Congo has temporarily suspended mining activity which means its interim earnings income will be negatively affected.

Shares in the company fell 7.9 percent to 65.37 rand at 1254 GMT.

- Reuters