German truck and bus maker MAN SE said Thursday third-quarter net profit fell 98 percent as demand for its products dropped amid the economic downturn and it took a charge for the acquisition of Volkswagen AG's Brazilian truck business.
MAN, based in Munich, said net income for the quarter fell to ⁈ion ($8.8 million) in the July-September period from ⁈llion in the third quarter of 2008.
The company booked ⁈lion in charges during the quarter related to the ⁈llion acquisition in Brazil earlier this year.
Revenue fell 14 percent to ⁈llion from ⁈llion in the third quarter of 2008.
Total third quarter order intake, one measure of underlying business, fell 14 percent to ⁈llion from ⁈ion in the year-ago quarter.
MAN said order intake, however, rose in the third quarter over the first two quarters, mainly helped by its large diesel engine business. MAN also builds engines for marine shipping and power generation.
"Following the sharp downturn, industrial production should recover slowly over a period of several years," MAN said in its report.
Investors sent MAN shares up 1.7 percent to ⁈in Frankfurt trading.
MAN said it expected the commercial vehicles business to remain at current levels. An exception to that forecast, however, will be the company's recently acquired business in South America. MAN said the strong market trend in South America would help make MAN Latin America a stable earnings driver.
MAN said the impact of the recession would be evident in its diesel engine business and turbo machinery units over the coming quarters as well.
The company didn't provide a more detailed outlook, but said its efficiency measures are having a positive effect and that it was confident of long-term growth prospects.
MAN said commercial vehicles' revenue fell 38 percent for the quarter to ⁈llion as companies held back from expanding fleets.
The diesel engines business revenue fell 4 percent to ⁈llion, partly as a result of falling world marine shipping volumes and fewer new ships coming on line.
The turbo machinery business, which includes compressors and turbines for the energy business and power generation, saw revenue fall 38 percent to ⁈llion.
MAN said for the first nine months, net income fell to ⁈llion from ⁈llion in the January-September period of 2008. Nine-month revenue fell 20 percent to ⁈llion from ⁈lion.
The company said investigations into alleged corruption are still ongoing, and that the risks involved with that process are currently unknown. MAN said earlier this year that prosecutors were looking into instances of alleged bribery to secure contracts within the company.
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