Supply chain disruptions are causing a production backlog at the world's largest truck maker, Daimler Trucks.
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shares Daimler truck Shares registered in Two factors, as it recorded record profits for the full year and announced a share buyback program worth 2 billion euros ($2.16 billion).
The German truck maker posted better-than-expected pre-tax profits of €5.5 billion for 2023, up 39% from the previous year's €4.4 billion. Analysts had expected EBITDA (earnings before income tax) to reach 5.2 billion euros.
Daimler Truck CEO Martin Daum told CNBC that the company had previously advised that its bottom line results would be at the high end of its expectations after a “very exciting” 2023.
“If we say the high end, we mean the high end,” he told CNBC's Annette Weisbach.
In a statement, Daimler described 2023 as a record year for the company, supported by excess demand following supply chain constraints in 2022. But it warned that revenue and profits were likely to remain flat in 2024 amid “challenging economic conditions.”
Daum said price pressures are likely to impact the company a little in 2024, but described the outlook as one of “sunny conditions.”
“We're going to have a good year,” he added. “Normalization has returned a little, but it is still at a good level.”
Daimler also said it would implement its buyback program over the next 24 months and proposed a dividend of 1.9 euros per share for 2023, up from 1.3 euros the previous year. Daum said this move indicates the health of the company.
“We are investing a lot,” he said. “We will continue at this pace but we still have money left over and that certainly belongs to our shareholders.”
It follows similar moves by other automakers including Mercedes and General Motors, which have also announced share buybacks and dividend increases in recent months to return cash to investors.
He added: “This is what not only our company can and will do, but in general healthy companies that are well-financed and have a strong balance sheet.”
