Daimler Truck increases profit sevenfold, writes off business in Russia

Daimler trucks

Daimler also continues to produce trucks under the Mercedes-Benz brand. The Russian business now had to be written down.

(Photo: Daimler AG)

Munich With the presentation of the first balance sheet as an independent company on Thursday, Daimler Truck wants to prove that it is one of the most important corporations in the country – even without the glamor of the former mother Mercedes-Benz. In the current week, Daimler Truck was included in the leading German index Dax.

In any case, CEO Martin Daum is “very proud” of what his team has achieved in the past year: “Despite the headwind caused by Covid-19 and bottlenecks in the supply chain, we have achieved our financial goals.” In fact, the world’s largest commercial vehicle manufacturer was able to increase its operating profit sevenfold , to 3.4 billion euros.

The bottom line is also a clear plus after a loss in the previous year. Sales increased by a fifth and sales by around ten percent to almost 40 billion euros.

Daimler Truck also significantly increased the return on sales adjusted for special effects from 1.9 to 6.1 percent through targeted savings. Nevertheless, the group had promised its shareholders a margin of up to eight percent. Daimler has thus only achieved the minimum of its own targets for 2021. Important competitors are almost twice as profitable: Volvo Trucks and Paccar recently shone with profit margins of over eleven percent.

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Daimler Truck wants to close this gap to its rivals by 2025. The group intends to increase its adjusted margin to up to nine percent in the current year. It helps that the group already has orders for 590,000 vehicles – over a third more than in the previous year and more than ever before.

Daimler truck lettering

In front of the administration building of the truck and bus manufacturer.

(Photo: dpa)

“We are determined to make our first year as an independent company a successful year for Daimler Truck,” says CEO Daum. He wants to increase his company’s turnover this year to up to 47.5 billion euros. However, a shortage of chips and higher commodity and energy prices are dampening the business recovery. The figures and forecasts were received very positively on the stock exchange: After the announcement, the share rose by 9.6 percent to EUR 26.20 on the previous day.

Russia business: 200 million euros written off

And in Russia, Daimler Truck writes off around 200 million euros. “We are taking a cautious approach and will write down all our Russia-related assets in the first quarter of 2022,” announced Jochen Goetz, CFO of Daimler Trucks, on Thursday. These “one-time expenses” as a result of the Ukraine war would be booked outside of the operating result. Daimler Truck has completely frozen its activities in Russia, like many other Western companies.

The group has been heavily criticized for its long-standing cooperation with the Russian truck giant Kamaz. The alliance with Kamaz was always limited to civilian commercial vehicles. At the same time, Kamaz has been supplying the Russian military separately with armored vehicles such as the “Typhoon-K”, a 20-ton vehicle that can withstand mines and booby-traps for years. And through its former parent company Mercedes-Benz, Daimler Truck de facto holds a 15 percent stake in the entire Kamaz group.

Russia’s war of aggression completely changed the relationship with Kamaz. The group has withdrawn its two representatives from Kamaz’s twelve-member board of directors and intends to sell its shares in the company as soon as possible. But this process is complex and apparently lengthy.

More: Task force against lack of parts: This is how the car manufacturers get the consequences of the war under control

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