Linde's materials handling division sales have fallen 2.6% from EUR1.44 billion (USD1.61 billion) in the first half of last year to EUR1.41 billion (USD1.56 billion) in the first half of 2003.

Orders received fell 2.9% from EUR1.53 billion (USD1.7 billion) to EUR1.49 billion (USD1.66 billion). Operating profit fell 10.3% to EUR52 million (USD57.81 million), from EUR58 million (USD64.48 million) in 2002.

Linde's TRIM.100 optimisation program was running according to plan, the company said, and was set to achieve cost savings of EUR30 million (USD33.35 million) this year. On the back of the savings, Linde said the materials handling division would see a "slight" improvement in sales and earnings.

"After a hopeful first quarter, business in Europe took another turn for the worse," said Linde's report, released on August 14. "Although orders for industrial trucks were slightly above last year's level, the increase was primarily attributable to high demand for small, low-margin warehouse trucks. There was, however, a decline in orders received for counterbalance trucks."

Linde said its German home market continued to reflect the European trend, with a drop in forklift orders even more apparent. The USA and Asian markets both reported a greater demand for counterbalance forklifts.

The success of the 39x and STILL RX 50 forklifts resulted in a substantial increase in market share in the European forklift market.

"The percentage of sales contributed by the service business rose to 39%. Our customers are increasingly opting for full-service contracts to streamline their logistics. Our broad, innovative service spectrum places us in a good position to benefit from this trend in the long term," the report said.

Linde president Dr Wolfgang Reitzle said: "We have rolled up our sleeves and are already beginning to see good results. These, however, are being suppressed by the market situation and negative currency effects."

For the first half of the year, the Linde Group increased overall sales by 1.2% from EUR4.12 billion (USD4.58 billion) to EUR4.17 billion (USD4.63 billion).