Profits jump for Swedish truckmaker Scania

Profits jump for Swedish truckmaker Scania
Swedish truckmaker Scania posted a sharp rise in third-quarter net profit on Monday but sales fell short of expectations because of slow recovery in Europe from 2009, a disastrous year for the industry.

“Demand in markets outside Europe is generally at a good level … Demand throughout Europe, including Russia, improved during the period from a very low level last year,” chief executive Leif Östling said in the earnings report.

Scania however noted the recovery in Europe was “nevertheless occurring slowly.”

The truckmaker’s net profit for the third quarter was up to 2.31 billion kronor ($352.7 million) against 278 million kronor for the same period a year earlier.

Sales jumped 38 percent to 18.56 billion kronor and orders were up 45 percent to 15.424 units.

The sales results missed the expectations of analysts surveyed by Dow Jones Newswires, who forecasted a jump of 48 percent to 19.86 billion, but the company’s net profit beat analysts’ estimate of 2.10 billion.

The truckmaking industry — very sensitive to the health of the economy — suffered immensely from the global economic slowdown but is recovering, with companies re-hiring laid off workers and picking up the production pace.

Scania said on Monday it had hired more than 1,000 workers in Europe during the second and third quarters and the company, which slimmed its work week to four days during the crisis, noted it had returned to the five day work week in the second quarter.

The Swedish company registers 80 percent of its sales in South America and Europe, and has a plant in Brazil. Trucks represent two thirds of its sales, with busses and engines, among other things, accounting for the rest.

Last week Volvo Group, another Swedish truckmaker which is the global number two behind Germany’s Daimler, beat results expectations, quoting the global economic recovery.

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