Scania reports net profit loss after demand drop

Scania reports net profit loss after demand drop
Swedish truck maker Scania reported on Wednesday a one-third plunge in net profit for 2012 and a cut in current production, but said that orders had risen in the fourth quarter.

Scania is a leading supplier of trucks for road transportation on international markets and the state of demand for heavy trucks is a barometer of overall economic activity.

Scania said that net profit had fallen by 30 percent last year from the 2011 level to 6.64 billion kronor ($1.0 billion).

Profit in the fourth quarter fell by 11.0 percent on a 12-month basis to 1.89 billion kronor. The average expectation of analysts polled by Dow Jones Newswires was 1.76 billion kronor.

For the whole of 2012, orders taken fell by 6.0 percent to 71,945 vehicles.

Chief executive Martin Lundstedt said in a statement:

“Given low demand for vehicles in Europe and the Middle East, the daily production rate is reduced by about fifteen percent in Europe in the beginning of the first quarter of 2013 compared to the end of 2012. A total of about 700 personnel on hire have been affected.”

But he said he saw good opportunities for growth, and the company would expand its sales and services organisation in emerging markets.

Commenting on the fourth-quarter rise in orders, he said this was driven by orders from Latin America,and particularly Brazil where subsidies had been a help.

“Order bookings in Europe remained at a low level. Customers are hesitant about investing in new vehicles in view of the uncertain economic climate,” he said.

He said that orders from Russia were strong but that orders from the Asia region fell mainly because of conditions on markets in the Middle East.”

The price of shares in the company was showing a fall of 0.94 percent at midday in an overall Stockholm market which was up 0.45 percent.

AFP/The Local/og

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