Read news from:
Austria
SHARE
COPY LINK

VOLVO

Volvo applies for massive European loan

Ford-owned Swedish car maker Volvo has applied for a 475 million euro loan from the European Investment Bank (EIB), the Swedish government said on Thursday.

Published: 29 January 2009 15:40 CET

“Volvo has requested a loan of around five billion kronor,” the government said in a statement, adding that a final agreement including Swedish state guarantees for the loan was expected to be concluded by March.

Maria Bohlin, a spokeswoman for Volvo Cars, confirmed the size of the loan requested by the firm and said: “The negotiations will continue until a decision is taken” by EIB, the European Union’s long-term lending institution.

Around three-quarters of a rescue plan for the Swedish car industry amounting to 28 billion kronor consists of Swedish government gurantees for loans from the EIB.

Ford announced on Thursday that Volvo Cars had a loss of $736 million in the fourth quarter.

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.

SHOW COMMENTS