Volvo Group reported second-quarter results Tuesday that were sharply higher than the first quarter, when the Covid-19 pandemic plagued business. The recovery was slowed by the continuing semiconductor crisis.
In spite of a shortage of semiconductors and other production materials, Volvo posted a quarterly profit above expectations despite “significant production stoppages”.
On a turnover of about 90.5 billion kronor (+23.6% over last year), the Swedish truck manufacturer has earned a quarterly profit of 8,9 billion kronor ($1 billion).
According to Bloomberg and Factset estimates, analysts expected a net profit between $880 million and $1 billion.
During the same period in 2020, the group had incurred a net loss of 282 million crowns due to the collapse of the global market due to the epidemic of Covid-19, before a gradual recovery of its activities in the second half of the year.
Although Volvo’s net profit has gradually recovered, it is still lower than in the second quarter of this year (11.1 billion kroner).
Swedish giant suffered from shortages of semiconductors and other production materials in April-June, resulting in “significant production stops,” according to CEO Martin Lundstedt.
Global supply chains have been disrupted by the Coronavirus pandemic, which has led to bottlenecks in many industries such as wood, plastics, and steel.
As has the whole industry, the manufacturer has been experiencing shortages of electronic components, particularly chips, for several months, preventing it from fulfilling many orders.
Volvo announced in March that it would have to halt production due to a shortage of semiconductors.
In the second half of the year, the automaker expects the global supply chain for semiconductors and other components to remain unstable and inconspicuous.
“There will be further disruptions and stoppages in truck production and other parts in the second half of the year,” Volvo warns.
For the full year, Volvo maintained its sales forecast for its truck business in Europe, North America and Brazil and raised it for China.