Truckmaker MAN says 2Q profit narrows to €27 million on flat orders, dropping sales

MAN SE’s 2Q net profit slims to €27 million

BERLIN — Truck maker MAN SE reported Thursday a 94 percent drop in second-quarter net profit, as sales fell while orders remained flat, and said it does not see the economic situation improving any time soon.

The Munich-based truck maker earned €27 million ($38.1 million) in the April-June period compared with €446 million a year earlier.

Sales fell 20 percent to €3.1 billion in the quarter compared with nearly €3.9 billion a year earlier. Order intake, a key barometer of the company’s future potential, slid 45 percent to €2.3 billion compared with €4.1 billion a year ago.

Looking forward, chief executive Hakan Samuelsson said that while the global economic downturn “appears to have been halted, our results remain under increased pressure and we are not expecting an improvement in the short term.”

“The global recession had a similar effect on MAN SE in the second quarter of 2009 as at the beginning of the year,” Samuelsson said. “Incoming orders are low and a turnaround is currently not in sight.”

But the company is still moving forward with reshaping its structure, including the planned combination of its diesel and turbo business operations starting next year, a move that will help streamline costs.

MAN is also looking abroad for new markets, having agreed to take a 25 percent stake in Chinese manufacturer Sinotruk.

Sinotruk is one of China’s major builders of heavy trucks, holding some 20 percent of the market. It sold more than 100,000 such trucks last year and had sales of €2.5 billion.

The partnership between the two companies means MAN will license some of its engines, chassis and axle technologies to Sinotruk to form the basis of a new heavy-duty truck series.

MAN, currently Germany’s second largest truckmaker behind Daimler AG, completed its acquisition of Volkswagen AG’s truck and bus operations in Brazil for around €1.4 billion in March.

For the first half of the year, the company earned €206 million in net profit compared with €768 million in 2008 while sales dropped 23 percent to €5.6 billion. Order intake also suffered, dropping 49 percent to €4.6 billion.

MAN shares closed down less than 1 percent to €48.77 in Frankfurt.

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