Volvo Group Q2 Profit Nudges Higher, Margin Improves
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Truck manufacturer Volvo Group posted net income of $1.06 billion, or 52 cents per share, in the three months that ended June 30, compared with $1.03 billion, or 50 cents, in the year-ago period, the company said July 19.
The company reports in Swedish krona, which acting Chief Financial Officer Jan Ytterberg said during a presentation performed poorly against benchmark currencies during the quarter.
The Gothenburg, Sweden-based parent of Volvo Trucks North America — which sells the Volvo Trucks and Mack Trucks brands in the U.S. Class 8 market — posted global revenue in the second quarter of $13.74 billion, a year-over-year increase of 18% from $11.59 billion, it said.
Net sales at VTNA totaled $2.7 billion in the second quarter of 2023, up 16% compared with $2.33 billion in the same period a year earlier, its parent company said.
Order intake in North America for Q2 decreased by 11% year-on-year to 8,708 trucks from 9,731 a year earlier, while deliveries increased 6% to 15,960 vehicles from 15,073 in the second quarter of 2022, it said.
Of those orders, Volvo Trucks accounted for 3,858 vehicles, a year-over-year decrease of 33%, while Mack Trucks contributed 4,837 vehicles, a 22% year-on-year increase.
When it came to deliveries in the most recent quarter, Volvo saw a 1% increase compared with the year-ago period to 8,337 from 8,226, while Mack posted an 11% jump to 7,555 from 6,823 in the year-ago period.
“We are gradually entering into a more normalized demand situation,” Volvo Group CEO Martin Lundstedt said in a speech accompanying the release of the results.
“With constrained supplies over the past year, it has been continuously important for many customers to renew their fleets and come back to their normal replacement cycle,” Lundstedt added during the presentation.
On the back of the improved expectations, Volvo Group boosted its forecast for overall North American heavy-duty truck sales in 2023 by 10,000 vehicles to 330,000.
In the first six months of 2023, the company said North American heavy-duty registrations totaled 137,163, a 23% increase compared with 111,256 in the year-ago period.
Volvo Trucks’ heavy-duty truck market share in North America through May decreased to 9.2% from 10.5% in the year-ago period, the parent company said, while Mack Trucks’ market share increased to 5.9% from 5.8% a year earlier.
Lundstedt said the most recent quarter had seen an improvement regarding the company’s North American supply chain bottlenecks, and further upside was expected in the third quarter. Supply chain issues have been an ongoing issue for VTNA, particularly for the Volvo brand.
VTNA order intake in the latest three-month period was weak since the order book for 2024 has not yet opened up, the company’s top executive said. The coming year’s order book in Europe had opened up quicker, he noted.
Globally, margins for the company’s trucking unit increased to 15.9% in Q2 from 12.2% in the year-ago period, slightly higher than its overall first-half margin of 15.1%, Volvo Group said.
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