- Barloworld generated an operating profit of R681 million, but it had to recognise R1.7 billion in impairments because of Covid-19.
- The company said travel restrictions in March affected most of its businesses.
- The company has implemented pay cuts and is consulting with employees about retrenchments to cut costs.
Logistics, car rentals and vehicle sales businesses is not the best space to be right now. Barloworld which owns brands like Avis, Manline Freight and operates leading motor franchise dealerships like Audi and BMW has plunged to R1.5bn loss for the six months to March 2020
The company whose operations span across many African countries, UK, Russia and the United Arab Emirates said it was already facing a "tough trading cycle" in the first half of its 2020 financial year but Covid-19 pandemic delivered the biggest blow as it disrupted global freight movements. By the end of March all the geographies Barloworld operate had started implementing lockdowns and travel restrictions.
The virus has forced Barloworld to write down millions of rands in goodwill and intangible assets on the back of lower cash flows that Covid-19 threatens to bring about. The group said it has recognised R1.7 billion in impairments because of Covid-19 and the slowdown in economic growth in the territories in which it operates.
The company has implemented a host of cost-cutting measures to stabilise its balance sheet. These include retrenchments, postponing non-essential investments in the business and freezing employment of new people. The group said its Car Rental division will be affected the most by the retrenchment plans. For the staff that will remain employed, Barloworld has implemented group-wide 12-month remuneration sacrifice plan, retirement fund payment holidays.