Scania reports surpise second quarter losses

Swedish truckmaker Scania was hit with unexpected losses in the second quarter due to weak demand, and warned that no recovery is yet in sight.

Scania said it had a net loss of 150 million kronor ($ 19.7 million) for the three months to June, after a year-earlier net profit of 3.04 billion kronor.

Analysts had forecast a net profit of around 222 million kronor for the period after the company posted first quarter earnings of 179 million kronor.

Revenue fell 40 percent from a year earlier to 14.43 billion kronor.

“During the seasonally weak third quarter, Scania foresees a continued low level of demand,” it said.

Evli Bank analyst Michael Andersson told Dow Jones Newsires that analysts “maybe… were a bit too optimistic because of the good first quarter.”

“There’s still too many new trucks out in Europe,” he said. “For sure, there won’t be a European recovery this year. The question is what will happen next year? If there is a bounce back then I’m afraid it will be very small.”

Faced with the worst slump in years, Scania has cut costs like may automakers. In May, it introduced a four-day work week for about 12,000 employees in Sweden, reducing their pay by 10 percent.

It had some 32,600 employees at end-June, with nearly 4,000 having left the company since September 2008.

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Volkswagen gets shares to take over Scania

Volkswagen, Europe's biggest carmaker, was set to take full control of Swedish truck manufacturer Scania on Tuesday after a small but crucial shareholder agreed to sell its shares.

Volkswagen gets shares to take over Scania
Swedish pension fund Alecta previously held out for a higher share price but agreed to sell its 2.04-percent stake in Scania, paving the way for Volkswagen to acquire full control the company.
On April 30, the German car giant said it lacked less than two percent more shares to reach its 90 percent goal, and thereby force the sale of the remaining shares.
"After new discussions with Volkswagen we have concluded that there will be no increase in their offer," Alecta said in a statement, referring to Volkswagen's refusal to pay more than 200 kronor ($30.5) per share.
In February, Volkswagen offered €6.7 billion ($9.3 billion) to acquire the nearly 40 percent of Scania it did not already own and to strengthen its position against its German competitors Daimler and the Swedish truck maker Volvo.
Scania's board of directors recommended shareholders not to part with shares at the price offered.
The offer expired on April 25th. However, confident that shareholders could be won over, Volkswagen extended its offer to May 16.
The German auto giant already owns truck and bus-maker MAN and bought into Scania in 2000.
It had previously said that it could make annual savings of €650 million through economies of scale by taking full control of the Swedish company.
The takeover is just the latest to hit Sweden's beleaguered vehicle manufacturing sector which has seen Chinese takeovers of the once iconic car brands Saab and Volvo.
Volvo Trucks announced more than 4,000 job cuts over the last six months and a voluntary redundancy scheme aimed to cut costs and increase profitability.