Barloworld Ltd has reported a net loss of ZAR135 million (USD17.4 million) for the six months ended 31 March 2010. This compares to a net profit of ZAR382 million (USD49.2 million) the previous year.

Revenue for the world's largest independent forklift dealer declined 16% to ZAR20.2 billion (USD2.6 billion), compared to the prior year's ZAR24.1 billion (USD3.1 billion).

Clive Thomson, CEO of Barloworld, says the past six months "have been challenging due to difficult trading conditions" for most of its businesses. The company fired workers to cut costs last year as demand for its equipment declined sharply (Forkliftaction.com News #396).

Barloworld's handling division suffered from the declining forklift market worldwide and posted revenue of ZAR2.1 billion (USD270.5 million) compared to the previous year's ZAR2.9 billion (USD373.6 million). The division posted an operating loss of ZAR19 million (USD2.5 million) compared to a ZAR44 million (USD5.7 million) operating profit in the year before.

The company is buoyed by the International Monetary Fund's forecast of real growth of 2.6% for South Africa in 2010, and the increased global demand for commodities is expected to boost Barloworld's mining equipment business.

Thomson says the company's order book is "substantially below" the level reported in September 2008 but "is trending upwards for the first time" in 18 months.

"In the handling division, we are seeing tentative signs of market improvements. In particular, demand for short-term rental, a historical lead indicator of demand recovery, has improved in the UK, US and South Africa," he says.

Thomson adds that mining companies that withheld their replacement capital expenditure in 2009 will probably start to "normalise the situation" in late 2010 and 2011.

Barloworld expects construction activity levels to remain sluggish in the short-term, while its Caterpillar equipment business in Iberia is expected to only recover in 2011 as the Spanish economy remains in recession this year.