Swedish truck maker Scania Q2 profits soar on higher volumes, cost cuts, better capacity use

Scania reports surge in Q2 profits

STOCKHOLM — Swedish truck maker Scania AB on Friday returned to a healthy second-quarter net profit, mainly thanks to higher vehicle volumes, better capacity use and lower costs. Improved margins also helped boost the results.

Net profit for the three month period ending June 30 bounced to 2.4 billion kronor ($326 million), up sharply from a previous loss of 150 million kronor. Last year’s results were hurt by dwindling capacity use as well as negative effects of currency hedging.

Revenues in the quarter jumped to 20.6 billion kronor, compared with 14.4 billion kronor in the same quarter in 2009, while operating margins climbed to 17 percent from 0.1 percent in the same period.

The Sodertalje-headquartered group also said that despite the lull usually experienced during the summer holidays in Europe, its vehicle deliveries in the third quarter are estimated to reach near the same level as the second quarter.

The Scania share rose 1.3 percent to 132.10 kronor ($17.96) on the Stockholm stock exchange.

“Higher vehicle volume, significantly increased capacity utilization and cost reductions that were implemented last year mainly explain the improvements,” CEO Leif Ostling said in the report. The European truck market demand has improved “from a very low level last year,” he said, adding that the market demand outside of Europe is “generally at a good level,” with especially the Brazilian truck market being driven by high economic activity.

As for Asia, Scania said recovery had been noted in all of its segments.

Order bookings for trucks soared to around 33,500 for the first six months of 2010, compared with only 11,700 in the first half of last year.

Scania employs some 33,000 people and operates in about 100 countries.