Downshift in profits for truckmaker Scania

Downshift in profits for truckmaker Scania
The Swedish heavy-truck maker Scania, one of the brands owned by Volkswagen, said Tuesday that its first-quarter profit fell by 28 percent owing to weaker demand and high development costs.

Scania posted net profit of 1.8 billion kronor (203 million euros, $268 million), on sales that slipped by three percent to 20.13 billion kronor.

The results were better however than an analyst forecast compiled by Dow Jones Newswires, which had anticipated a net profit of 1.6 billion kronor on

sales of 18.3 billion.

“Lower vehicle deliveries and lower capacity utilisation pulled down earnings, as did higher costs for future-related projects,” a statement quoted Scania chief executive Leif Östling as saying.

Deliveries declined on a 12-month basis by 15 percent to 16,238 vehicles, while orders were 19 percent lower at 15,809 units.

“Total deliveries fell due to a deceleration in demand in late 2011,”Östling explained.

Overall order bookings for trucks during the first quarter of 2012 were in

line with the end of last year. The market in southern Europe is still at a

low level,” he added.

Shares in Scania nonetheless jumped by 4.8 percent in morning trades on the

Stockholm stock exchange, while the market was 2.0 percent higher overall.

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