Truckmaker Volvo profit beats forecast, sets shareholder payout

Business

Swedish truckmaker AB Volvo reported fourth-quarter core earnings well above analysts’ expectations on Wednesday, raised its forecasts for some of its main markets and rolled out a hefty shareholder payout amid a broad recovery in demand.

But Volvo also cautioned that the rebound, along with a global chip shortage, had left its supply chain under pressure which would lead to production disturbances and higher costs at least during the current quarter.

Adjusted operating profit at the maker of trucks, construction equipment, buses and engines rose to 10.93 billion Swedish crowns ($1.30 billion) from 9.22 billion a year earlier, above the 8.77 billion seen by analysts according to Refinitiv data.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets, which has improved the confidence in the future among our customers,” Volvo Chief Executive Martin Lundstedt said in a statement.

Order intake at Volvo, which rivals Germany’s Daimler and Traton, amounted to 86,069 trucks, up 61% from the year-ago quarter on the back of a broad recovery.

The company, which abandoned plans to pay annual and extra dividends last year as the first wave of the COVID-19 pandemic struck but still retained a vast cash pile, said it would make a total shareholder payout of 15 crowns per share for 2020.