Scania has registered another strong quarterly global financial result and appears to have overcome supply problems with net sales rising to $AUD 5.43 billion (SEK 36.1 billion) while earnings in the first quarter amounted to an all-time-high of $AUD633 million (SEK 4,207 million), delivering an operating margin of 11.7 per cent
Scania CEO, Henrik Henriksson revealed the results last week with the results certain to have a strong bearing on the rumoured upcoming IPO of parent company Traton ( VW Commercial vehicles), which is now likely to happen sooner rather than later.
“Higher vehicle and service volume, currency effects and the market mix contributed positively while higher production costs due to the changeover in Latin America and supply chain constraints impacted earnings negatively,” said Henrik Henriksson.
“Scania’s last PGR series truck has rolled off the assembly line and only trucks from the new truck range are now produced in the entire global production system. The final stage of the transition was completed during the quarter with the changeover of production in Latin America,” he added.
Henriksson did mention that some limitations remain in the flexibility and capacity of the company’s global production system and that there is still a higher than normal cost situation in general for products and production related to the new truck generation and that measures put in place to normalise cost levels are continuing.
“Order bookings for trucks fell by nine per cent in the first quarter of 2019 compared to the high level during the year-earlier period while demand for trucks in Europe remains strong due to the positive economic situation,” Henriksson added.
The Scania boss said that the trend in demand in Latin America is positive thanks to the recovery in Brazil, while demand in Eurasia was impacted negatively by a slowdown in Russia and a reduction in orders in the Middle East affected its performance in Asia while demand in other parts of Asia remained strong.
“Buses and coaches were also impacted negatively by lower order intake in the Middle East and overall order bookings for buses and coaches were 28 per cent lower than last year.
“In the Engines business area demand remains at a high level and we see ever-increasing interest in Scania’s gas vehicles.
“From a sustainability perspective, biogas is preferable since this fuel reduces CO2emissions by up to 90 per cent (20 per cent with natural gas). However, the use of biogas is hampered by a shortage of fuel. For this reason, Scania is working actively in various partnerships to secure the production of biogas and thereby enable a broader penetration for sustainable gas solutions to reduce carbon footprint,” he concluded