Vehicle manufacturer Volvo reports a clearly higher profit than expected. Order intake, however, fell sharply. “It has been a two-part quarter – commercially strong, but emotionally difficult,” says Volvo’s CEO Martin Lundstedt to TT.
This morning, Volvo is the next big stock market giant to report for the first quarter. The adjusted operating profit of SEK 12.7 billion was significantly higher than the market’s average expectations of SEK 10.4 billion. CEO Martin Lundstedt continues to promote good world economy, which results in high transport volumes and good construction activity in most of the markets.
– We also see that the truck business is going very strong. It is the best first quarter ever in terms of deliveries, sales and results for the truck business, says Martin Lundstedt.
Reduced order intake
Sales for the Group amounted to SEK 105.3 billion, compared with SEK 94 billion a year earlier. On the other hand, net order intake for trucks fell sharply, to 45,594, compared with 85,461 last year.
– This is because we have been restrictive in taking orders. We have a very strong order book that we must deliver, says Lundstedt.
Demand has continued to be higher than supply due to strained global supply chains.
The forecast for the remaining 2022 is now kept unchanged for both Europe and North America, while a certain decline is seen in China.
Bottlenecks
The problems with deliveries of semiconductors and other components are still major, with disruptions, unpredictability and lack of shipping capacity. Therefore, Volvo expects continued disruptions and stops both in the production of trucks and in other parts of the Group.
– Some of the supply chains that have been bottlenecks are now being gradually improved, but at the same time new ones are emerging, says Lundstedt.
Volvo has stopped all production and sales in Russia. The market accounts for about 3 percent of total sales.
– In this situation, with the knowledge we have now, it was necessary to make a write-down of SEK 4 billion, says Lundstedt.
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