The world's largest forklift dealer, Barloworld Ltd, has suffered a 39% drop in full-year profit as the global economic downturn reduced demand for its products.

Barloworld says headline earnings per share (EPS) totalled 212 cents in the year ended September 2010 compared to 351 cents a year ago. Headline EPS is the main profit measure in South Africa.

Barloworld's operating profit fell 30% from the previous year's ZAR1.994 billion (USD284.2 million) to ZAR1.376 billion (USD196.3 million) while revenue declined 10% to ZAR40.8 billion (USD5.8 billion). All of its business divisions experienced falls in revenue except for its automotive business.

"The bulk of the shortfall occurred in our (earthmoving and power systems) equipment businesses, where total revenue fell by ZAR4.8 billion (USD684.5 million). The drop off in activity levels experienced in equipment in Southern Africa in the second half of 2009 continued into [2010] while demand in Iberia remained weak throughout the year," the company says.

Besides distributing Hyster forklifts, Barloworld also represents Caterpillar, Avis, Audi, BMW, Ford, General Motors, Mercedes-Benz, Toyota and Volkswagen in its equipment, logistics, automotive and handling divisions.

Barloworld CEO Clive Thomson told Business Day that the second half of the financial year yielded a stronger performance than the first half thanks to improved trading conditions for most of its businesses. He said cash flow for the year was strong as a result of intense focus on working capital management and the successful sales of its Scandinavian car rental business in July.

Barloworld has acquired the remaining 50% of a Caterpillar joint venture in Russia, subject to regulatory approvals, and expects this to result in long-term growth opportunities in the mining, infrastructure, power and forestry segments in Siberia and Russia.

New auto sales and renewed spending by miners are inspiring the company to be optimistic about the coming fiscal year. It says it is "well placed" to pursue growth opportunities that will improve financial returns.