Scania's 1Q profit down 93 percent because of falling demand

Swedish truck and bus maker Scania AB reported a 93 percent drop in first-quarter net profit, as the global financial crisis continued to weigh on demand and capacity utilization.

Net profit for the first quarter was 179 million kronor ($22.1 million), down from 2.5 billion kronor in the same period last year, Scania said.

The Sodertalje-based company said sales fell 28 percent to 15.9 billion kronor from 22 billion kronor in the first quarter 2008.

Scania's share fell 1.75 percent to 84.25 kronor ($10.4) in Stockholm.

"Practically all markets where Scania has operations are characterized by low economic activity due to the turbulence in the financial markets and its impact on the real economy," Scania CEO Leif Ostling said in a statement.

He said the company doesn't expect this to change in the coming quarters.

Orders for the quarter fell by 70 percent to 6.1 billion kronor from 20.2 billion kronor in the same period a year ago.

German automaker Volkswagen AG is the biggest owner in Scania, holding around 46 percent of the capital and 71 percent of the votes in the company.

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