German truck maker MAN warns of falling profit
German truck maker MAN, a unit of European car giant Volkswagen, warned Tuesday of a "significant" decline in financial performance this year due to increased provisions and the difficult situation in its engine business.
"In the current fiscal year, there has also been a significant downturn in the after-sales business of MAN Diesel & Turbo, which was not expected to this degree," MAN said in a statement.
The company blamed its bleak outlook on the continuing difficulties in the shipping industry, the European sovereign debt crisis as well as the poor economic situation in the Middle East.
With these problems, "the situation in the after-sales business of MAN Diesel & Turbo will continue to be tense in the next years," the statement said.
That meant the group's original profit expectations for the medium term would not be fulfilled.
In addition, a tax audit had uncovered "substantial tax risks."
Taken all the factors together, return on sales in 2013 "will fall significantly below the 2012 figure, whereas revenue will remain at the previous year's level," MAN said.
In 2012, MAN booked a return on sales of 6.1 percent, with net profit of 189 million euros ($247 million) on sales of 15.772 billion euros.
© 2013 AFP