European Truck Maker’s Profit Slides 95 Percent

MAN SE rounded off a miserable reporting season for Europe’s truck makers by unveiling a 95 percent plunge in second quarter net profit amid plummeting sales and orders.

The Munich-based truck and engineering group earned $30.8 million in the three months to June 30 against $618.8 million a year ago as sales slumped 20 percent to $4.3 billion.

Operating profit fell 73 percent to $202 million.

“The global recession had a similar effect … in the second quarter as at the beginning of the year,” said MAN chief executive officer Hakan Samuelsson. “Incoming orders are low and a turn round is currently not in sight.”

Samuelsson said the truck unit suffered a “severe setback” with a second quarter order intake just 38 percent of the year earlier figure.

Truck orders in the first half collapsed 65 percent to 17,390 units from 54,227 units in the 2008 period, prompting the company to halt production for 10 weeks and introduce shorter hours through the rest of the year.

First half truck sales shrunk 57 percent to 21,296 units from 50,070 units and revenue was down 44 percent at $3.64 billion. Sales in Russia have virtually ground to a halt, MAN said.

The truck division booked a first half operating profit, however, of $25.2 million thanks to the contribution of MAN Latin America, the Volkswagen truck and bus operation in Brazil which MAN acquired for around $2 billion in March.

MAN said it is continuing to grow its truck business despite the global economic crisis. It recently agreed to take a stake of 25 percent plus one share in Sinotruk, China’s leading heavy truck maker.

“This creates an even broader base for our successful international growth – in particular in the BRIC [Brazil, Russia, India, China] countries,” MAN said.

Looking ahead, “our results remain under pressure and we are not expecting an improvement in the short term,” Samuelsson said.

Contact Bruce Barnard at brucebarnard47@hotmail.com.