SHARE
COPY LINK

EARNINGS

MAN industrial group posts 2009 loss

The German industrial group MAN swung to a net loss last year owing to exceptional items, but remained profitable at the operating level, it said on Monday.

MAN industrial group posts 2009 loss
Photo: DPA

The group, which makes heavy trucks and buses along with turbo machinery and diesel engines, reported a net loss of €258 million, compared with a profit of €1.25 billion in 2008.

MAN’s operating profit also plunged but remained in the black at €504 million, down from €1.729 billion a year earlier, on sales that shed nearly 20 percent to €12 billion from €14.9 billion in 2008, a statement said.

The group put the drop in sales down to a “massive decline in demand in the transportation sector in particular,” as truck markets crashed owing to the global economic downturn.

MAN also took a write down of €382 million related to its stake in the Swedish truck company Scania, and paid a €150-million fine in December stemming from alleged corruption in foreign and domestic markets.

The last three months of the year were tough for MAN, with a quarterly net loss of €472 million and an operating profit that was one third that of the same period a year earlier, at €126 million.

The group did not give an overall outlook for this year but did say that “business at MAN (commercial vehicles) is expected to remain at the current level in 2010.”

Part-time shifts would remain in effect at production plants, at least for the first six months of the year, MAN said.

Sales were expected to decline slightly at the turbine and engine divisions, which are to merge in the coming months, generating estimated savings of €60 million, the group said.

That would also leave the commercial vehicles division free for a mooted tie-up with Scania under the aegis of Volkswagen, which owns Scania outright and also holds a dominant stake in MAN.

MAN shares jumped by 1.24 percent to €50.69 in early trading on the Frankfurt stock exchange, while the DAX index of leading stocks was up by 0.63 percent overall.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

READ ALSO:

With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

SHOW COMMENTS