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 reports net profit loss after demand drop

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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Volkswagen gets shares to take over Scania

Volkswagen, Europe's biggest carmaker, was set to take full control of Swedish truck manufacturer Scania on Tuesday after a small but crucial shareholder agreed to sell its shares.

Volkswagen gets shares to take over Scania
Swedish pension fund Alecta previously held out for a higher share price but agreed to sell its 2.04-percent stake in Scania, paving the way for Volkswagen to acquire full control the company.
On April 30, the German car giant said it lacked less than two percent more shares to reach its 90 percent goal, and thereby force the sale of the remaining shares.
"After new discussions with Volkswagen we have concluded that there will be no increase in their offer," Alecta said in a statement, referring to Volkswagen's refusal to pay more than 200 kronor ($30.5) per share.
In February, Volkswagen offered €6.7 billion ($9.3 billion) to acquire the nearly 40 percent of Scania it did not already own and to strengthen its position against its German competitors Daimler and the Swedish truck maker Volvo.
Scania's board of directors recommended shareholders not to part with shares at the price offered.
The offer expired on April 25th. However, confident that shareholders could be won over, Volkswagen extended its offer to May 16.
The German auto giant already owns truck and bus-maker MAN and bought into Scania in 2000.
It had previously said that it could make annual savings of €650 million through economies of scale by taking full control of the Swedish company.
The takeover is just the latest to hit Sweden's beleaguered vehicle manufacturing sector which has seen Chinese takeovers of the once iconic car brands Saab and Volvo.
Volvo Trucks announced more than 4,000 job cuts over the last six months and a voluntary redundancy scheme aimed to cut costs and increase profitability.