Scania reports H1 earnings of 3.97B Swedish kronor, down 6.7% from year-ago period as stronger currency, competitive pricing environment pulls down earnings; net sales rise 7% to 42.13B kronor

Nevin Barich

July 24, 2013 (press release) – Scania’s earnings for the first half of 2013 fell to SEK 3,971 m. The stronger Swedish krona and a competitive pricing environment pulled down earnings. Higher vehicle volume and better capacity utilisation had a positive effect.

Operating income fell to SEK 3,971 m. (4,257), and earnings per share fell to SEK 3.47 (4.06) 

Net sales rose by 7 percent to SEK 42,139 m. (39,338)

Cash flow amounted to SEK 744 m (1,769) in Vehicles and Services

Comments by Martin Lundstedt, President and CEO:

“Scania’s earnings for the first half of 2013 fell to SEK 3,971 m. The stronger Swedish krona and a competitive pricing environment pulled down earnings. Higher vehicle volume and better capacity utilisation had a positive effect. Scania’s order bookings in Europe continued to improve during the second quarter. The economic climate remains uncertain, but there is a replacement need. 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.

Euro 6 demand

In some markets there is a demand for Euro 6, and Scania is well-positioned due to the launch of its second-generation Euro 6 engines. The company’s market share in Europe has increased, among other things thanks to its leading position in Euro 6. In Latin America, too, Scania has captured market shares. Order bookings in Brazil and Argentina remained at a high level. Order bookings for buses and coaches outside Europe were at a good level. In engines, order bookings increased compared to the first quarter, related to America. Scania is continuing to develop its service business and volume is increasing, but the stronger krona is adversely affecting revenue. In southern Europe, lower economic activity is also negatively impacting service demand.

Increased production rate

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. A further increase is planned, starting in the fourth quarter. Scania is continuing its efforts to expand annual technical production capacity towards 120,000 vehicles. To strengthen competitiveness, the level of activity related to development projects remains high, at the same time as Scania is expanding the sales and service organisation in emerging markets.” 

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