Sweden's Volvo posts 597 million dollar third-quarter loss

Oct 23, 2009, 7:38 GMT

Stockholm - Swedish heavy-vehicle maker Volvo on Friday posted a third-quarter pre-tax loss of 4.1 billion kronor (597 million dollars) blaming continued weak demand in its main markets.

In the same business period last year, the Volvo Group, which does not include the Ford-owned car division, posted pre-tax income of 2.8 billion kronor.

Net sales in the 2009 third quarter declined 31 per cent to 48.5 billion kronor, resulting in a net loss of 2.9 billion kronor for the quarter.

However, the 'decline in demand has bottomed out,' Volvo chief executive Leif Johansson said.

In Europe - except for Russia and Spain - demand 'continued to stabilize,' he said, while the economic growth in Asia has helped demand for the group's products.

The group's outlook remained that 'the total European market for heavy trucks will be at least halved in 2009 compared with 2008 and that the North American heavy-duty market will decline by 30-40 per cent.'

Volvo planned to continue its cost-saving measures.

Third-quarter order bookings for trucks increased 20 per cent compared to the second-quarter 2009, totalling 31,998 units.

Truck deliveries dropped 51 per cent year-on-year to 27,616 units, but the decline was 7 per cent compared to second-quarter 2009.

The bus division sold 3,990 units, up 4 per cent year-on-year, while order bookings increased by 10 per cent.

The Volvo Group sells trucks and heavy vehicles, buses and construction machinery, and includes the divisions Volvo Aero and Volvo Penta.

At the end of September, the Volvo Group had some 92,000 employees worldwide, compared with 101,381 at year-end 2008.