Automaker Volvo Cars stated on Thursday that demand for its merchandise remained robust whereas chip constraints had been regularly enhancing, after posting income above forecasts.
A worldwide scarcity of semiconductors has compelled the Gothenburg-based carmaker and world friends to chop automobile output regardless of strong demand.
As for a lot of firms, the warfare in Ukraine has resulted in greater prices for uncooked supplies, vitality and freight for Volvo, which is searching for to mitigate the results by adjusting costs.
“So far those price increases have come through and it hasn’t dampened demand at all,” Chief Financial Officer Bjorn Annwall informed Reuters.
Volvo shares, down by 16% this 12 months by way of Wednesday however up 22% from their IPO worth, rose 3.9% in early commerce.
Investment financial institution JPMorgan stated in a notice that Volvo had reported a wholesome efficiency, including provide chain issues and uncooked materials value administration could be key within the second and third quarters.
Volvo stated the upper prices had a restricted impression within the first quarter, would partially impression the second quarter, and would absolutely impression the second half of the 12 months.
The firm in February suspended all gross sales, service and manufacturing in Russia, which final 12 months accounted for about 3% of its internet group gross sales.
Also learn: Volvo hikes costs of its Indian lineup by 4 per cent: Prices elevated by as much as Rs. 4 lakh
“Clearly, we don’t foresee any business in Russia for the foreseeable future,” Annwall stated.
Volvo stated manufacturing was down on the finish of the primary quarter as a result of a short lived scarcity of a selected semiconductor and warned that the provision drawback was anticipated to persist within the second quarter.
Its first-quarter working revenue fell to six.0 billion Swedish crowns ($607.4 million) from 8.4 billion a 12 months earlier however beat the 4.13 billion anticipated by 4 analysts polled by Refinitiv.
Revenue rose 8% to 74.3 billion crowns, topping the 71.15 billion anticipated by analysts.
Volvo, majority owned by China’s Geely Holding, maintained its 2022 forecast for marginal year-on-year progress in deliveries.
Its automotive gross sales fell 20% within the first quarter to 148,295 vehicles, it reported this month.
Source: www.financialexpress.com”