Barloworld faced a tough trading environment as it saw its revenue fall by 12.2% in the first half of the year, revenue amounted to ZAR*25.2bn whilst operating fell from 5.5% to 4.4%.
The Automotive and Logistics division’s performance is reflective of the current trading conditions affecting all business units, driven by reduced market demand and pressure on pricing as a result of a weak local macro-economic environment. During March, trading was negatively affected by the stringent South African lockdown regulations, but the company anticipates recovery in the second half. It believes full volumes are likely to return to prior levels by 2021.
Commenting on the results, Barloworld CEO Dominic Sewela said, “The first half of the financial year was characterised by a combination of a tough trading cycle and the initial impact of the COVID-19 pandemic. While we have seen lower performance compared to the prior period, we have acted quickly to identify areas of exposure and implement austerity measures to minimise the impact on our business. We believe these actions together with our resilient balance sheet will serve us well in ensuring the longevity of the business.”
The company believes its strong balance sheet and stable mature business platforms are key strengths that will help it navigate through challenges presented by the COVID-19 pandemic and macroeconomic fallout. Business confidence in the regions Barloworld operates in has dropped significantly and the group expects the average consumer to remain under pressure, while the trading environment will be impacted by the lower outlook for recovery and growth.
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