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April 27, 2005

SWEDEN: Scania posts lower than expected rise in Q1 pre-tax earnings

Shares in Swedish truck maker Scania reportedly fell more than 6% on Wednesday after it posted a lower-than-expected rise in first-quarter pre-tax earnings and said 2005 would be an "off year" in its key European market.

Shares in Swedish truck maker Scania reportedly fell more than 6% on Wednesday after it posted a lower-than-expected rise in first-quarter pre-tax earnings and said 2005 would be an “off year” in its key European market.

The group’s quarterly pretax profit was 1.70 billion Swedish crowns ($US242.3 million), compared with 1.37 billion in the year-ago quarter and 1.73 billion forecast in a Reuters poll.

Sales rose to 13.9 billion crowns from 13.1 billion, but were below a forecast of 14.3 billion, with demand in western Europe somewhat subdued during the period, the report said.

According to Reuters, Scania said weak economic growth in key markets such as Germany, France and Italy was affecting private consumption and industry demand, fuelling uncertainty about demand for heavy trucks.

Scania, which sells its trucks and buses in Europe, Asia and Latin America, reportedly said  that order intake in the quarter was down 1% at 15,441 units, but order bookings in western Europe, its biggest market, slid 5%.

“All in all, it looks very weak. I think the most interesting point is that order intake in western Europe is down 5 percent, and eastern Europe down 24 percent,” an analyst told Reuters.

The firm expected the truck market in Latin America, its second-biggest market, to stay strong in the first half of 2005, the news agency added.

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