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VOLVO

Losses mount for Volvo Cars

Volvo Cars reported a pre-tax loss of $120 million for the second quarter on Thursday, down from a loss of $91 million in the corresponding period of 2007, according to owner Ford's interim report.

Published: 24 July 2008 15:54 CEST
Losses mount for Volvo Cars

The decline in Volvo Cars results is due primarily to lower volumes and a disadvantageous product mix, net price levels and currency effects, according to Ford. The decline has been partially offset by cost cutting.

Turnover declined from $4.4 billion to $4.3 billion.

Volvo Cars plans to manufacture 80,000 cars in the third quarter and 110,000 in the fourth quarter. This can be compared with 112,000 in the second quarter.

The whole Ford concern posted a net loss of $8.7 billion for the period. Profits in the corresponding period of 2007 amounted to $750 million. Ford’s figures were weighed down by exceptional items totalling $8 billion, including the substantial depreciation of various assets.

Ford’s results were below analyst expectations. Excluding exceptional items losses amounted to $0.62 per share in comparison with a table of analyst forecasts compiled by news agency Reuters, of $0.25 per share.

Revenues however held up better than expected and came in at $38.6 billion, in comparison with $44.2 billion in the corresponding period of 2007.

Ford CEO, Alan Mulally, said in a press conference on Thursday that the company would meet the challenges of the future by shifting focus from pick-ups and SUVs to smaller vehicles.

VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Published: 3 February 2021 12:21 CET
Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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