Swedish truck maker Scania has reported a steep decline in second quarter net profit, reflecting lower sales and overcapacity in its core markets in Europe. But the outlook is brighter, as order bookings improved.
Scania's net profit in the second quarter of 2012 was 1.9 billion kroner (227 million euros) - down 42 percent from the same period last year, the Swedish truck maker said Friday.
In addition, net sales fell 16 percent to 19.21 billion kroner, while the operating margin declined to 10.1 percent from 14.4 percent last year.
Deliveries in the second quarter were 15,794 units - down 26 percent compared with 21,235 units last year.
The Swedish truck maker, which belongs to the German Volkswagen group, was hard hit by falling demand in Europe, where customers "deferred purchases", said Scania's Chief Executive Leif Ostling in a statement.
According to figures released by Scania, European markets for heavy trucks decreased by 6 percent to about 114,900 units during the first quarter of 2012.
"This imposes strict demands for flexibility in Scania's production and sales and services organization", Ostling said.
Scania, which boasts a market share of about 13 percent, said order bookings for the company in Europe had improved somewhat compared with the first three months of the year, but remained at a low level.
In Latin America, where the company generates about 24 percent of its sales, Scania said that demand was also lower than during the strong years 2010 and 2011 due to a weaker economy.
uhe (Reuters, dpa)