Volvo Cars Q4 Earnings Down On Weak Sales; Continues To See Strong Customer Demand

Swedish luxury car maker Volvo Cars, owned by Chinese automaker Geely Automobile Holdings (GELYF.PK), reported Friday that its fourth-quarter basic earnings per share declined to 0.66 Swedish krona from last year’s 1.92 kronor.

Operating income was 3.7 billion kronor in the quarter, down from 4.9 billion kronor a year ago. Operating margin was 4.6 percent, down from 5.8 percent last year. Adjusted EBIT margin was 7.1 percent, compared to 5.8 percent a year ago.

Revenues were 80.1 billion kronor, down 6 percent from last year’s 85.3 billion kronor. Demand and order intake remained strong, but production was restrained.

Retail sales were down 20 percent to 168,000 cars. The company noted that electrified ‘Recharge’ line-up accounted for 34 percent of total sales. Plug-in hybrids amounted to 28 per cent of volumes, while fully electric cars made up 6 percent of total sales in the fourth quarter.

Looking ahead, the company said the share of fully electric cars as part of total sales will continue to grow as Volvo Cars increases the annual production capacity for fully electric cars to 150,000 cars after summer. For the full year 2022, the company expects that share to have more than doubled compared with the full year 2021.

Uncertainty is still high. While the component shortage has eased somewhat, the supply chain is expected to remain a restraining factor.

At the same time, Volvo Cars continues to see strong customer demand, and expects that electric cars will grow faster than the overall market. This should allow the company to continue growing sales volume in 2022.

Source: Read Full Article