Scania has reported strong growth in profit and sales for its third quarter.

16,295 trucks and buses were delivered during the period, a 9% increase year on year.

Operating profit was up by over 26% from SEK2.017bn to SEK2.552bn.

Revenue was up 21% in the third quarter and up 16% in the first nine months. Scania said the strong growth was mainly due to higher volume of vehicles and services as well as a higher share of vehicles with Euro 4 and Euro 5 engines and price increases.

The truck maker expects to deliver about 75,000 vehicles during 2007, and expects this volume level to continue into 2008 and beyond because of an overall shortage of transport capacity in Europe. This has resulted in increased transport prices for the first time in many years.

Scania has been increasing capacity to keep pace with demand and, by the end of 2009, expects to have increased capacity to 100,000 units a year. Longer term it says it can increase its capacity to some 130,000-140,000 vehicles.

The shortage of transport capacity is also leading to a larger number of older vehicles on
the roads requiring service, boosting Scania's aftersales business. Scania said it will invest about SEK1bn annually during the coming years in expansion of the service network, primarily in central and eastern Europe, including Russia.

Scania expects continued strong growth with good profitability and cash flow. For the period 2007-2009 it expects annual sales growth to average 10% and to achieve an operating margin of 12-15%. Return on capital employed is expected to pass 30%.