Truck and bus manufacturer MAN SE has blamed continued difficult economic conditions and uncertainty surrounding future developments for a 39% year-on-year drop in annual operating profits from more than €1bn (£807m) in 2011 to €656m. It also warned that future profits are likely to be hit by the troubled market.
The German-owned commercial vehicles and mechanical engineering equipment supplier blamed the decrease primarily on its commercial vehicles business.
MAN Truck & Bus arm, which has its UK HQ on Swindon’s Blagrove business park, was unable to extend its first half positive order intake into the third quarter. Over the three quarters it generated new business worth €6.9bn — 2% less than in the same period last year. However, third quarter orders were worth €1.8bn, down 16% on the prior-year period and significantly below the previous quarters.
The weak European commercial vehicles market was offset by growth in Russia and other regions outside Europe in the first half of the year. But business in Europe in particular, and especially in Germany, continued to decline in the third quarter and likewise slowed in Russia
Chief executive officer Dr Georg Pachta-Reyhofen said that the company is expecting a further decline in revenue due to the economic conditions in Europe and a lack of increase in demand in Latin America due to the introduction of the Euro V emission standard in Brazil.
He said: “Given the contraction in the European commercial vehicles market and the ongoing muted demand in Latin America, we are expecting revenue in the commercial vehicles business area to decline by somewhat more than 5%.
“We are continuing to anticipate revenue growth of roughly 5% for the power engineering business area.” Group return on sales is expected to be approximately 6%."
