28 de octubre de 2014 / 13:13 / en 3 años

UPDATE 2-MAN cuts outlook again as truck demand tumbles

* Q3 oper profit slumps 49 pct to 82 mln euros

* MAN cut truck ops forecast in Sept, sales target in July

* Q3 results “certainly less than satisfactory” - CEO

* MAN must deepen Scania tie-up to cut costs -analyst (Adds analyst comment, background, peer comparison)

By Andreas Cremer

BERLIN, Oct 28 (Reuters) - Germany’s MAN SE downgraded its business outlook for the third time in as many months on Tuesday and stepped up efforts to cut costs, as weakening demand for its trucks and falling orders weighed on results.

Third-quarter operating profit slumped by half to 82 million euros ($104 million) and new orders fell a fifth to 3.47 billion euros, with its core European and South American markets continuing to shrink, the Munich-based truckmaker said.

The Volkswagen-owned company said it now expects operating profit to come in slightly above last year’s 309 million euros, after previously guiding for that measure to be clearly higher.

Profit was mainly driven by MAN’s non-trucks operations such as diesel engines and turbines, although truck and bus sales contributed over three-quarters to group sales of 3.7 billion euros.

“MAN is performing much worse than rivals” including Sweden’s Volvo and Scania, Frankfurt-based Commerzbank analyst Sascha Gommel said. “They have to cut costs urgently to avoid being overexposed to volume swings.”

A second analyst said VW needed to move faster to integrate MAN with Scania, which it also owns.

MAN is shifting production of buses to lower-wage Turkey, and its trucks chief Anders Nielsen told a conference call it was seeking to trim material costs by recruiting new suppliers.

“Our results are certainly less than satisfactory,” Chief Executive Georg Pachta-Reyhofen said. “We are doing everything we can to get back on track as soon as possible.”

The manufacturer last month slashed the profit outlook for its main truck and bus division on falling demand in Europe and the impact of the crisis in Ukraine.

In late July, it cut its full-year forecast for group sales after revenue at its Latin American truck division slumped 17 percent due to slowing growth in Brazil and the weaker real currency..

To foster a turnaround, MAN started to trim production this month by scaling back the hours of about 4,000 workers at two truck-making plants in Germany and Austria.


By comparison, Swedish rival Volvo posted a surprise gain in quarterly profit to 2.91 billion crowns as deep cost cuts more than offset lacklustre demand in some major markets.

Volvo, and German peer Daimler, benefit from strong exposure to the growing U.S. trucks market where MAN is not selling.

Instead, MAN is confined to Europe where truck demand has slowed after construction firms and freight haulers last year rushed to buy older but cheaper vehicles ahead of emission-rule changes; and to Brazil, where slowing growth and the weaker real currency are hurting sales.

Still, sales of trucks weighing 16 metric tons or more rebounded in the European Union to grow 2.7 percent in September, the European Automobile Manufacturers Association said on Tuesday, after falling 6.1 percent in August and 4.3 percent in July.

Parent VW needs to act faster to integrate MAN with more efficient Swedish peer Scania to rein in costs, said Arndt Ellinghorst, London-based analyst at investment researchers ISI Group.

Europe’s largest automaker sold about 2 billion euros in preferred stock earlier this year to help finance the takeover of Scania. VW has been pushing closer integration of its truck brands to take on global leaders Daimler and Volvo.

“Greater progress on aligning MAN with Scania would certainly help address the cost issues,” Commerzbank’s Gommel said.

$1 = 0.7872 euro Reporting by Andreas Cremer; Editing by Maria Sheahan and John Stonestreet

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