Volvo sees higher sales despite supply disruptions

Volvo trucks are seen for sale in Linden, New Jersey, US on 23 May, 2022Reuters

Swedish truck maker Volvo on Tuesday reported higher sales and profits in the second quarter despite the company still feeling the effects of global supply chain disruptions.

The world’s number two truck maker reported a better than expected revenue of 118.9 billion Swedish kronor ($11.4 billion) and a net profit of 10.5 billion.

Analysts had predicted an average of 107 billion in revenue and 8.9 billion in net profit, according to a survey by Factset.

“In this quarter, we have had extra costs related to supply chain disruptions as well as higher costs for material and have continued to work proactively and successfully with price management to mitigate these effects,” Martin Lundstedt, CEO of Volvo, said.

“The situation in the global supply chain for semiconductors and other components continues to be unstable, characterised by disruptions, unpredictability and lack of freight capacity,” he noted.

“We will therefore continue to have disruptions and stoppages both in the production of trucks and in other parts of the group.”

Like many other companies, Volvo has also been impacted by Russia’s invasion of Ukraine. In February, it said it had stopped sales and halted production at its Kaluga plant.

In April, Volvo announced it had nine billion kronor in assets related to Russia and that in the first quarter assets amounting to four billion would negatively impact its results.

In 2021, approximately three per cent of Volvo’s net sales were attributable to Russia, according to the company.