Traton Financial Services, the financial arm of commercial vehicle manufacturer Traton Group, today reported increased revenue but lower operating profit for the first quarter as increased portfolio volumes came with higher funding costs.
BY THE NUMBERS: Munich-based Traton Group reported in Q1:
- Incoming truck and bus orders landed at 74,307 units, up 11.9% year over year;
- Unit sales were 73,090 units, down 9.9% YoY;
- Truck sales reached 57,566 units, down 16.3% YoY;
- Bus sales finished at 8,328 units, up 65.5% YoY;
- MAN TGE van sales were 7,196 units, down 2% YoY;
- The BEV unit sales ratio ended at 0.9%, up 0.5 percentage point YoY;
- Sales revenue totaled 10.6 billion euros ($12.1 billion), down 10.1% YoY;
- Traton Financial Services sales revenue landed at $605.4 million, up 17% YoY;
While Traton Financial Services experienced revenue growth amid the company’s global offerings push, operating profits for financial services declined 26% as return on equity declined, Michael Jackstein, chief financial officer and chief human resource officer of Traton Group, said during today’s earnings call.
“As the ramp-up of the financial services network comes with higher costs, the TFS return on equity decreased to 9.1%,” he said. “Other reasons for the margin decline were higher funding and risk costs, which came with a larger portfolio.”
BIGGER PICTURE: Parent Traton Group’s North American orders fell 35% to 12,400 vehicles, and unit sales dropped 12% to 17,800 vehicles because of tariffs and other macroeconomic concerns, leading to the removal of the second shift at the Escobedo, Mexico, plant to adjust Class 8 truck production, CEO Christian Levin said during the earnings call.
“In the U.S., uncertainties about tariffs, economic outcomes and inflation added to the negative market sentiment. In addition, the dealing with the EPA 2027 emission regulation remains unclear,” he said. “Our customers are not willing to make larger investment decisions.”
MARKET OUTLOOK: Shares of Traton [OTCPK: TRATF] were up 7.4% from market open today to close at $34.29. The company has a market cap of $17.1 billion.
Editor’s note: All amounts have been converted to U.S. dollars.
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