LEINFELDEN-ECHTERDINGEN (dpa-AFX) - Commercial vehicle manufacturer Daimler Truck has made a surprisingly stable start to the year in the face of the economic downturn. Despite a significant decline in sales, the Group was able to generate slightly more revenue, while profits rose surprisingly significantly. Group CEO Martin Daum believes the Group is on course to achieve its targets for the year, but warned on Friday that business in Europe will be more difficult. The share price rose sharply.

The share was up 4.1 percent on the Tradegate trading platform compared to the Xetra close the previous evening. The share price was thus able to extend its year-to-date gain of a quarter. The share price had risen in particular as a result of the optimistic forecast at the beginning of March. Analyst Michael Aspinall from the US investment bank Jefferies spoke of a "strong start" to the year. The market expectations, which had previously been at the lower end of the annual forecast, were able to move slightly upwards.

As already known, Daimler Truck experienced a 13 percent drop in sales to 108,911 vehicles in the first quarter. Nevertheless, turnover was just under 13.3 billion euros and thus slightly above the previous year's figure, as the Dax-listed company announced in Leinfelden-Echterdingen. Group CEO Daum spoke of a "normalization" of the markets.

Towards the end of and after the Covid pandemic, customers across the industry had ordered a lot to make up for the backlog in demand caused by the production stoppages. Haulage companies and local authorities still had to replace old trucks and buses. In the meantime, however, the special economic situation is ebbing noticeably, and orders at Daimler Truck have also been declining for some time. In the first quarter, incoming orders fell by 14 percent year-on-year to 105,807 vehicles.

The management around CEO Daum confirmed the annual forecasts. "We are on track with our financial targets for the year as a whole, but are increasingly feeling the headwind in Europe," said the manager. Group profit climbed from 795 million to 847 million euros.

The decline in sales in the quarter was mainly due to the Asian market, which is not particularly profitable anyway, where Daimler wants to merge the business of its own Mitsubishi Fuso brand with the Toyota subsidiary Hino. On the other hand, Daimler Truck was able to score points in its most lucrative market, North America. The strong position in the USA with the Freightliner and Western Star brands has also made Daimler the global market leader for heavy trucks. The operating margin in North America rose by almost one percentage point. The economy in the USA continues to run smoothly despite a significant rise in interest rates.

Together with a recovery in the bus division, North America provided a tailwind for operating profit. Group earnings before interest and taxes adjusted for special effects increased unexpectedly by 4 percent to 1.21 billion euros. A positive development in sales prices was offset by cost increases due to inflation. In the industrial business - i.e. excluding financial services - Daimler Truck increased its adjusted operating margin by half a percentage point to 9.3 percent. On average, analysts had expected only a slight increase.

In Europe, on the other hand, things went less smoothly in view of the economic problems. The Mercedes-Benz truck brand, which operates on the home continent and in Latin America, suffered losses in sales, earnings and margins. The market decline in Europe outweighed the recovery in demand in Brazil, according to the Group./men/lew/jha/