The commercial vehicle manufacturer Daimler Truck surprised the analysts with a decent profit. Corona, inflation and the Ukraine war have not made themselves felt so far.
The truck and bus manufacturer Daimler Truck did a surprising amount of business in the second quarter, mainly thanks to price increases. This also drove the profit from day-to-day business to levels unexpected by experts, despite rising costs for freight, material and energy. CEO Martin Daum wants to take the momentum into the second half of the year, as he said.
However, the group must continue to pay attention to the rising costs, as CFO Jochen Goetz warned in view of a confirmed annual forecast for sales and earnings. The shares of the Dax group increased slightly before the market.
The paper gained one percent on the Tradegate trading platform. The price has lost 13.5 percent in the year to date. Daimler Truck has been independent since December last year and separated from the former parent company Mercedes-Benz (then still Daimler). Analyst Himanshu Agarwal from the US investment bank Jefferies saw the operating result significantly higher than expected by the market. Even without favorable one-off effects, the group delivered a solid quarter, judged expert Tom Narayan from the Canadian bank RBC. However, some investors had expected an increase in the margin forecast – these could now be disappointed.
Sales climbed 18 percent year-on-year to 12.1 billion euros, according to the company in Leinfelden-Echterdingen near Stuttgart. Group earnings before interest and taxes adjusted for special effects increased by 15 percent to just over one billion euros. Vehicle sales increased by just four percent to just under 121,000 vehicles. Above all, price increases ensured the upturn in earnings, which were noticeably higher than analysts had expected. The Swabians increased the net profit attributable to the shareholders by a good half to 922 million euros.
Better availability of electronic chips expected
In the vehicle business – i.e. excluding financial services – the adjusted return on sales was 8 percent and was therefore 0.1 percentage points below the previous year’s figure. This puts it at 7.0 percent after six months – the lower value of the target range of 7 to 9 percent. In the second half of the year, the management expects better availability of electronic chips and also intends to further increase sales.
The general economic conditions for global demand for commercial vehicles should therefore remain favorable in the second half of the year. Due to high demand, Daimler Truck had announced the largest price increases ever for this year. In the second quarter, these became effective for the first time in the most important market, North America, and from July there will be another round of increases in Europe.
In the individual divisions, CFO Goetz now expects the financial services to have a slightly higher equity ratio than previously, but profitability in the Asian business is likely to be somewhat weaker than planned. The reason for this is a lower investment result from a joint venture in China because the Covid lockdowns slowed down the economy there, as the manager explained in a conference call with analysts. Outside of China, the situation in Asia is expected to improve over the course of the year.
In the outlook, the company assumes that there will be no production downtime due to a lack of gas. Russia’s war in Ukraine and the very high inflationary pressure could also play a role – the development of the corona pandemic also remains uncertain.
Calm look at Elon Musk’s plans
The company is not worried about new competition either: Daimler Truck CEO Martin Daum reacted calmly to the announcement by Tesla boss Elon Musk that he would deliver the first electric semi-trailers by the end of the year. Musk has to climb a huge hill, at the top of which Daimler Truck is waiting when the truck comes on the market, Daum said. Tesla will be taken seriously, like any other competitor.
Musk announced the version of an electric truck with a range of around 800 kilometers on Twitter on Wednesday. He gave no further details such as quantities. The vehicle was presented by Musk at the end of 2017 and production was then planned for 2019. After that, however, Tesla preferred to use the existing capacities in battery production for passenger cars.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
