Sweden’s Volvo Group, the world’s second biggest truck maker, on Wednesday reported a sharp drop in 2020 earnings due to the coronavirus pandemic, although business rebounded in the fourth quarter
Stockholm (UrduPoint / Pakistan Point News – 3rd Feb, 2021 ) :Sweden’s Volvo Group, the world‘s second biggest truck maker, on Wednesday reported a sharp drop in 2020 earnings due to the coronavirus pandemic, although business rebounded in the fourth quarter.
In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.
However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.
The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.
Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.
Operating margin fell from 11.5 to 8.1 percent.
However, the group did manage to cut costs by 20 percent.
Volvo’s business regained strength in the second half of the year.
“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.
“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.
— to www.urdupoint.com