n n n ‘. concat(e. i18n. t(“search. voice. recognition_retry”),’n
By Marie Mannès
STOCKHOLM (Reuters) – Swedish truck maker AB Volvo reported a better-than-expected fourth-quarter profit on Friday, albeit with weak order entry, as the carmaker adjusted production levels downwards amid slowing demand.
The industry and investors are bracing for a tougher 2024 for the trucking market, with analysts reporting slowing demand in Europe as shipping volumes fall below traditionally peak levels.
Volvo has lowered its forecast for the overall European truck market this year, recording 280,000 registrations for the region from 290,000. However, it maintained its forecast of 290,000 for the North American heavy-duty truck market.
It raised its forecast for China’s medium and heavy-duty truck market to 800,000 from 700,000 previously.
Volvo shares, which have gained about 20% over the past 12 months, topping 6% on Sweden’s benchmark stock index, were down only about 3% by 08:08 GMT.
JPMorgan said Volvo reported effects but low order entry, while Royal Bank of Canada pointed to low margins as an area of concern.
“The current effects call into question the sustainability of margins,” JPM said.
Order intake during the quarter decreased 9% to 49,347.
Volvo CEO Martin Lundstedt called for “normalization” in several markets and segments.
“We have been successful in mitigating price inflation through price management, managing supply chain disruptions and cutting inventory,” Lundstedt said in a statement.
Other truck makers are also feeling the pressure, with rival Daimler Trucks citing persistent source shortages in key regions as an explanation for why the group’s sales rose just 1% for the full year of 2023.
Operating profit adjusted for divestment costs amounted to 18. 4 billion Swedish kronor ($1. 76 billion), above the 17. 2 billion Swedish crown forecast by analysts in an LSEG survey.
Volvo has proposed a 2023 dividend of SEK 7. 50 per share, up from SEK 7. 0 in 2022. This is in addition to an additional dividend of SEK 10. 50 per share, compared to SEK 7 in the previous year.
(Reporting by Marie Mannes in Stockholm and Elsa Ohlen in Gdansk; editing by Terje Solsvik, Janane Venkatraman and Tomasz Janowski)