Daimler Truck hits record returns margin amid rising costs

BERLIN (Reuters) -Daimler Truck achieved a second-quarter record adjusted return on sales of 10.3% for its industrial business, the company said on Tuesday, even as it faced rising monthly costs from inflation.

Supply chain issues were easing, the truck and busmaker said, with some bottlenecks remaining this year though no major production downtime was expected.

The company’s order intake was down partly because it had not yet opened up order books for next year, including in major markets like the United States and Japan, company executives said on an analyst call following half-year results.

Chief Executive Martin Daum was hesitant to give a specific forecast for 2024, but said “it won’t be a bad year next year”, adding the truck industry was “far from crisis”.

Daimler (OTC:) Truck raised its guidance for annual adjusted sales returns across the group last month to a range of 8.5% to 10% from 7.5% to 9% previously, citing easing of supply chain constraints, stronger demand in core markets and the after-sales business.

The company struggled in the first quarter with supply chain issues for semiconductors, but has maintained that a general improvement in supply chains would lift its profits.

Unit sales rose by 9% in the second quarter with revenue up 15%, indicating the company had upheld its strategy of combating rising costs by hiking prices – but incoming orders were down by 12% in the first half of the year.

Earnings per share in the quarter fell slightly to 1.11 euros compared to 1.12 euros a year earlier.

($1 = 0.9101 euros)