Scania Reports Profit Down, But Orders Increase image

Although truck maker Scania reported a declined second quarter net profit, its order bookings improved.

Swedish truck maker Scania reported a decreased second quarter net profit of 1.9 billion kroner (227 million euro), down 42% from the same period last year, due to lower sales and overcapacity in the European market. Net sales were down 16% to 19.21 billion kroner and the operating margin decreased 10.1% from 14.4% in 2011. The second quarter deliveries were also down 26% to 15,794 units, compared to 21,235 units last year.

Scania, owed by German Volkswagen group, reported decreased sales due to falling demand in Europe, where customers set back purchases. The heavy truck sales were down 6% to 114,900 units in the first half of 2012.

“This imposes strict demands for flexibility in Scania’s production and sales and services organization”, said Scania’s Chief Executive Leif Ostling.

But the company, which has a market share of about 13%, said its order bookings in Europe improved compared to the first three months of the year, but remained at a low level. In Latin America, where Scania reaches almost 24% of its sales, demand is still lower compared to the strong 2010 and 2011 years.