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Scania plans production hike as profits fall

Swedish truck manufacturer Scania announced on Friday that it would step up production to meet demand in Europe, after a decline in profits in the second quarter.

Scania plans production hike as profits fall

Profits fell five percent in the second quarter from the figure a year earlier to 1.376 billion kronor ($210 million), even as sales jumped 19 percent to 22.798 billion kronor.

The decline in profits was mainly due to rising operating costs.

According to Scania, the second half is expected to be favourable as customers rush to buy trucks before new tougher emission standards kick in.

“The economic climate remains uncertain, but there is a replacement need,” CEO Martin Lundstedt said in a statement.

“Demand is also supported by customers that are investing in Euro 5 vehicles before year-end, when the transition to the Euro 6 emission standard will occur.”

As Euro 5 trucks are cheaper, orders in Europe were up 25 percent year on year in the second quarter, the company said.

“In light of improved order bookings in Europe, Scania will increase its daily production rate during the third quarter in order to maintain short delivery times,” Lundstedt said.

AFP/The Local

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REPORT

Swedish banking giants report mixed fortunes

Swedish bank Nordea on Thursday posted falling profits in the second quarter while competitor Handelsbanken announced growing figures for the same period.

Swedish banking giants report mixed fortunes
Handelsbanken CEO Pär Boman. File photo: TT

Nordea's net profit fell by 11 percent to €686 million ($928 million), compared to €771 million a year earlier.

"Interest rates continue to come down and the general level of economic activity as well as volatility is low," Nordea chief executive Christian Clausen said in a statement.

"We have seen continued strong activity in our savings area and in the corporate advisory business."

Revenue was almost stable at €1.368 billion, compared to €1.391 billion for the same period last year.

"Low loan growth and interest rates also put pressure on our net interest income," Clausen said.

The bank said that its cost-cutting plan was "progressing as planned" and that it expects to see the results by the end of 2014 and onwards.

Nordea said it has saved €300 million since the launch of the cost-reduction measures at the beginning 2013.

The second quarter looked better for Handelsbanken, which posted profits increasing by 9.0 percent compared to a year earlier to 4.034 billion kronor ($590 million).

Revenue reached 6.704 billion kronor, slightly above the 6.653 billion kronor the bank posted in the same period of 2013.

The loan loss ratio was 0.07 percent, the same as last year.

Handelsbanken is Sweden's largest bank in terms of deposits.

Between April and June, its liquidity reserves stayed above 800 billion kronor, as the bank continued its expansion in the British market.

"The bank has decided to establish a fifth regional bank in the UK, with its head office in Leeds," Handelsbanken said in a statement, adding that this would start in the first quarter of 2015.

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