2nd UPDATE: MAN 2Q Net Profit Higher, Expects Better Sales, Orders in 2010
July 29 2010 - 3:50AM
Dow Jones News
Truck maker and engineering firm MAN SE (MAN.XE) Thursday
reported a jump in second-quarter net profit driven by improving
demand for new vehicles, and said it expects full-year revenue and
orders to rise after a woeful 2009 in the wake of the financial
crisis.
"MAN's key performance indicators have improved significantly
compared with the difficult year 2009," MAN said in a statement,
noting however that "many areas still have a long way to go to
return to the high levels of capacity utilization in previous
record years."
Net profit soared to EUR151 million from EUR27 million in the
second quarter, with net profit attributable to shareholders at
EUR153 million, up from EUR22 million. Operating profit rose on the
year to EUR276 million from EUR144 million.
Revenue was up at EUR3.61 billion from EUR3.11 billion last
year. Order intake, an important gauge for future business,
increased in the second quarter to EUR3.75 billion from EUR2.28
billion last year.
Analysts had expected operating profit of EUR235 million,
revenue of EUR3.51 billion and order intake of EUR3.38 billion.
MAN attributed its good performance overall to its commercial
vehicle operations, and noted especially strong demand in Brazil.
Commercial vehicles' orders in the first half were up 70% and
revenue grew 32% in the division.
First-half orders in the power engineering engine division grew
39% while revenue declined 6%.
For the full year, MAN said it expects "a significant increase"
in orders, a rise in revenue of over 10% and a return on sales at
the level of the first six months. MAN didn't provide a specific
earnings outlook, but is due to host a conference call later
Thursday.
Global truck makers were hard hit by eroding demand for vehicles
during the economic downturn, but increasing signs of an industry
recovery in several key markets have sparked optimism that recovery
is firming up.
Last week, Swedish peer Scania AB (SCV-A.SK) reported a robust
return to net profit in the second quarter and said vehicle
deliveries in the third quarter are expected to remain steady,
echoing a rise in revenue at AB Volvo (VOLV-B.SK).
Daimler AG (DAI.XE), the world's largest truck maker by sales,
Tuesday reported a significant sales improvement in all of its
major markets.
MAN is currently in talks over reaping cost synergies as part of
a truck alliance with Volkswagen AG (VOW.XE) and Scania. Volkswagen
holds a majority stake in Scania and is MAN's largest shareholder
with a 29.9% stake.
Cooperation talks have made little progress in recent years.
Volkswagen has so far remained tight-lipped about the prospects for
a closer tie-up and the time frame for achieving significant
efficiency savings still remains vague.
However, in April Volkswagen's influental supervisory board
chairman Ferdinand Piech, who holds the same post at MAN, said he
was optimistic about forging a closer tie-up and reiterated that
cost savings of up to EUR1 billion could be reached if the
companies cooperate and share costs, for example, related to the
upcoming Euro6 emission regulation. He pledged at the time to
allocate more time to the truck project after Volkswagen and
Porsche Automobil Holding SE (PAH3.XE) ended their feud last
year.
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512;
christoph.rauwald@dowjones.com
(Sarah Sloat in Frankfurt contributed to this article.)
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