Barloworld reducing operations in Russia, closing some divisions

NOVOSIBIRSK. April 15 (Interfax) - Vostochnaya Tehnica LLC (VT), a Russian heavy equipment supplier that is part of South Africa's Barloworld Group, is closing small autonomous divisions and cutting staff because it is scaling back operations, the company said in a note attached to its financial statements.

"In light of the decrease in the scale of operations, a decision was made in March 2025 to close small, autonomous divisions and reduce staff in the cities of Aldan, Mirny, Moscow, Neryungri, Petropavlovsk-Kamchatsky, Udachny, Ulan-Ude and Yakutsk," the note said.

The company said a substantial share of its operations involves importing goods with payments made in U.S. dollars, "which comes with great risk of losing money on the subsequent purchase of equipment for conducting operations." In light of these risks, VT enters into forward and futures contracts.

As of December 31, 2024, the company had 9.7 billion rubles in liabilities on two futures contracts due in March and June 2025, and in 2024 it opened five forward contracts totalling $21 million with payment due by June 9, 2025.

VT reported net profit to Russian Accounting Standards down 23.7% to 3.73 billion rubles in 2024. Revenue fell 16.3% to 18.35 billion rubles, while cost of sales rose 1.6% to 12.36 billion rubles. Gross profit plunged 38.5% to 5.99 billion rubles and operating profit tumbled 46.9% to 3.43 billion rubles.

United Kingdom-based Vostochnaya Tehnica UK Limited transferred 0.1% of shares in VT to Barloworld Investments Proprietary Limited (South Africa) on February 19, 2025 through the distribution of dividends in kind, a note to the financial statements said. However, the UK company's indirect stake in VT remained unchanged at 100%.

VT, which was registered in 1998 and is headquartered in Novosibirsk, supplies construction and mining equipment, generators and power equipment, and provides technical support for construction, road and mining equipment. The company has 17 divisions, seven service centers and 17 parts warehouses, its website said.

Barloworld is a dealer for Caterpillar equipment in Southern Africa and Eurasia, the website said.