* Net loss after minorities 43 mln eur vs 6 mln loss in poll
* VW domination prompts tax asset writedowns for MAN
* MAN does not rule out possible net loss for full-year
* Volkswagen bids 80.89 eur per MAN shr until mid-Sept
(Recasts, changes net profit to reflect minorities, adds
comments from management and analyst)
By Irene Preisinger and Christiaan Hetzner
MUNICH/FRANKFURT, July 30 German truck producer
MAN said it may make a net loss this year after a
surprisingly poor second quarter due to the tax fallout of its
absorption by parent Volkswagen, a deal on which
some shareholders are still holding out.
MAN earlier this month became a fully-controlled unit of VW
- Europe's largest carmaker by car sales, revenue and market
value - which is forging a global empire that runs from Ducati
motorcycles through Golf hatchbacks to 16 tonne Scania
The move requires Volkswagen to absorb all of the
truckmaker's future profits and losses and meant MAN could no
longer claim any of its tax-loss carry-forwards in Germany.
Its second-quarter net loss of 43 million euros ($57.0
million) attributable to shareholders was far worse as a result
than analysts' average estimate of a 6 million euro loss.
"Everything else in the income statement was pretty much
bang in line with expectations all the way down to the pretax
level, so the miss came from a higher tax burden," said NordLB
analyst Frank Schwope.
The tax writedown is the latest in a number of large one-off
costs MAN has registered at a time when Volkswagen still has to
persuade minority shareholders to accept its buyout offer.
The "domination" agreement giving Volkswagen full control of
MAN was passed by shareholders in early June, but for now its
shares are trading far above the 80.89 euros offer that the
German car giant has made for the stock it does not hold.
Some analysts say MAN is in better underlying shape than
this year's results show, making the case either for investors
to hold out for a better offer or accept an alternative proposal
from VW a fixed annual cash payment of 3.07 euros per share.
Volkswagen, which now holds just over 75 percent of MAN
shares, had once been willing to pay 95 euros per voting share
two years ago during a prior tender bid.
"The domination agreement should put both a floor and
ceiling on the stock, so while capital gains for MAN
shareholders are limited, the annual cash payout equates to 3.5
percent - attractive in the current low-rate environment," said
Volkswagen aims to merge the operations of MAN more closely
with those of its other commercial truck unit, Scania of Sweden,
and has appointed former Scania executives to key functions
within the group, including ex-CEO Leif Ostling as VW's new top
executive for commercial vehicles and Anders Nielsen as MAN's
new European trucks chief.
Nielsen told a news conference that he expected MAN to
benefit later this year from customers rushing to order the last
Euro V trucks before a more stringent emissions norm takes
effect in January, when trucks equipped with the expensive
exhaust treatment technology are expected to cost around 10,000
Still, MAN said a second half buoyed by higher demand in
Europe might not be able to compensate for a first-half net loss
after minorities of 383 million euros, even if it would be
profitable on an operating level.
The company reaffirmed annual operating profit would decline
significantly and, as signalled last month, doubled to 286
million euros its provisions for risks relating to power plants
that its power engineering unit is building for French utility
EDF in the Caribbean and Corsica.
None of that had much impact on the stock on Tuesday,
however, MAN trading only 0.2 percent lower as of 1109 GMT
compared to a half percent rise for the index of its European
($1 = 0.7545 euros)
(Reporting by Irene Preisinger Writing by Christiaan Hetzner;
Editing by Patrick Graham)