Scania’s operating income in the first quarter of 2010 rose to SEK 2,130 m. The increase is explained primarily by improved capacity utilisation and cost reductions that were implemented last year.
- Operating income rose to SEK 2,130 m. (506) and earnings per share rose to SEK 1.78 (0.22)
- Net sales increased by 4 percent to SEK 16,503 m. (15,859)
- Cash flow amounted to SEK 2,366 m. (874) in Vehicles and Services
Comments by Leif Östling, President and CEO
“Scania’s operating income in the first quarter of 2010 rose to SEK 2,130 m. The increase is explained primarily by improved capacity utilisation and cost reductions that were implemented last year. In the first quarter of 2009, Scania had low capacity utilisation and sizeable excess inventory due to low demand. The improvement in capacity utilisation was mainly due to strong demand in Brazil, where the truck market has benefited from both tax breaks and interest rate subsidies. Scania has taken advantage of the Group’s common global product range and has been able to swiftly meet the strong demand in Latin America. Demand in the European truck market improved somewhat from a very low level. There is still overcapacity among hauliers, and freight prices are thus depressed. Small and medium-sized companies are continuing to have difficulty finding financing for their operations and vehicles, especially in central and eastern Europe. In Asia, a recovery is under way in all truck segments. Demand for buses and coaches was stable. The market for engines improved, especially in Latin America. Activity in the transport business has improved, contributing to higher demand for services, especially in Latin America and Asia. Cash flow in Vehicles and Services totalled SEK 2,366 m. Together with the reduced portfolio in Financial Services, the Group’s net debt decreased by SEK 5,7 billion. In April, Scania launched a new range of V8 engines, including a completely new top-of-the-line model withan output of 730 hp, making it the most powerful engine to date in the truck market. This means that Scania has all the technical solutions and also the engine platform needed to fulfil the Euro 6 emission standards that go into effect at the end of 2013. In Scania’s overall assessment, the level of demand in the first quarter will continue during the second quarter. Capacity utilisation in the production network will gradually improve during the second quarter.”
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