Volvo, the Swedish truck maker, has announced its results for the second quarter of the year. The company reported a net profit of 10.77 billion Swedish kronor ($1.05 billion), compared with SEK10.44 billion in the same period last year. Sales also showed strong growth, rising by 18% to SEK140.82 billion.
Truck Business: Volvo highlighted the positive truck fleet utilization in Europe and North America during Q2. While larger fleets continued their replacement cycles, smaller companies were more cautious due to lower freight volumes, spot rates, and softer used-truck prices. Despite increased material costs and R&D expenses, the adjusted operating income for the trucks business increased by 57%, with an adjusted operating margin rise from 12.2% to 15.9%.
Supply Chain Challenges: Volvo acknowledged that its supply chain and industrial system are currently strained due to labor shortages, lack of materials and components, and transport services. These challenges are impacting various areas of the business.
Orders and Deliveries: The company experienced a 10% decline in truck order intake during Q2, amounting to 48,300 vehicles. Volvo explained that this reflects their cautious approach to order placement and customers adopting a more conservative stance. On a positive note, deliveries increased by 5% compared to the previous year, totaling 63,800 trucks. The company attributes this achievement to the diligent efforts made across the entire value chain to overcome supply disturbances.
Revised Outlook: Volvo has adjusted its outlook for the European and North American heavy-duty truck market, raising it by 10,000 units. The new forecast predicts a market size of 330,000 units in both regions by 2023. The overall truck market guidance for all other regions remains unchanged. However, in the construction equipment sector, Volvo has revised its market growth outlook for China to -30% to -40%, down from the previously estimated range of -5% to -15%.