Volvo: lower sales lead to Q1 losses

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Lower sales volumes contributed to an operating loss of SEK 88 M in the first quarter 2013. Order intake in the first quarter totaled 2,109 buses, which was 6% higher than the same period last year. Strategic orders have been secured.

For 2013 the European bus market is expected to remain on the same low level as in 2012. Price pressure is severe across Europe as utilisation of production capacity in the industry remains very low.

In North America there are early indicators of a recovery in the transit market. The situation could however be affected by cuts in the US federal spending. Coach operators are still cautious due to pending tax rises.

In South America quoting activity has increased, driven by low financing rates, World Cup tenders and tenders for BRT systems.

The Asian market continues to grow, but on lower levels. Tender activity is healthy in China, while in India, the coach market has slowed down in the beginning of the year. In India, the government has announced a grant for the purchase of buses, JnNurm, valid 2013-2016. Deliveries during Q1 of 2013 amounted to 1,825 buses, compared to 2,565 units for 2012, a decrease of 29%. In a majority of the main markets deliveries were on a lower level compared to the same period in 2012.

Order intake in Q1 totalled 2,109 buses, which was 6% higher than the same period last year.

Volvo Buses further strengthened its position in sales of hybrid buses. During Q1 the first hybrids were delivered to Luxembourg, along with 44 hybrids to the UK. Perth in Australia also received the first hybrid bus of its kind in the Asia- Pacific region in January 2013. An order for 300 buses to Chicago was also signed.

Net sales in the first quarter decreased by 32% to SEK 3,482 M (5,086). Adjusted for currency fluctuations, sales decreased by 27%. Buses reported an operating loss of SEK 88 M compared to an operating income of SEK 46 M during Q1 of 2012. The main reasons for lower earnings are the decline in sales and price pressure. Compared with Q1 of 2012, operating income was positively impacted by changes in currency exchange rates in an amount of SEK 29 M. Operating margin was a negative 2.5% (positive 0.9%).