Swedish commercial vehicle manufacturer Volvo Group reported Friday weak profit in its first quarter on Russia provision, despite higher net sales and deliveries.
The latest results included a 4.13 billion Swedish kronor negative effect from provisioning of assets related to Russia. All sales, services and production in Russia have been suspended since the war in Ukraine started and sanctions were imposed.
Martin Lundstedt, President and CEO, said, “Economic activity continued to be good in Q1 2022 with high transport volumes and good construction activity in most markets. We increased sales and improved profitability…. The high business activity combined with our growing service contract portfolio resulted in continued good service growth, which was up by 19 percent.”
For the first quarter, income attributable to owners of AB Volvo declined to 7.07 billion francs from last year’s 9.00 billion francs. Earnings per share were 3.46 francs, down from 4.35 francs a year ago.
Operating income amounted to 8.56 billion kronor, lower than prior year’s 12.07 billion kronor. Operating margin dropped to 8.1 percent from 12.8 percent last year.
Adjusted operating income was 12.68 billion kronor, up from 11.82 billion kronor last year despite a challenging supply chain situation. Adjusted operating margin was 12.0 percent, compared to prior year’s 12.6 percent.
Net sales increased 12 percent to 105.32 billion kronor from 94 billion kronor a year ago. Adjusted for currency movements and the divestment of UD Trucks, the increase was 11 percent.
Volvo CE’s net sales decreased 9 percent, primarily related to China. Net sales in bus segment increased 28 percent and Volvo Penta’s sales grew 23 percent.
Net order intake declined to 45,594 units from last year’s 85,461 units. Deliveries grew to 55,588 units from 52,444 units a year ago.
Net order intake, number of construction equipment, was 20,683 units, down from 35,616 units last year. Deliveries, number of construction equipment, was 20,779 units, lower than 30,957 units a year ago.
In Sweden, Volvo AB shares were trading at 167.16 francs, up 1.82 percent.
Source: Read Full Article