Swedish heavy truck maker Volvo Group on Wednesday posted a 30-percent drop in net profit in the first quarter as vehicle sales fell by nine percent on uncertainty over trade tariffs.
"Recent tariffs and other trade restrictions imposed or considered to be imposed by the US and other countries have significantly increased uncertainty about trade conditions in markets where the Group is present, as well as in relation to global and regional supply chains," Volvo Group said in a statement.
"The situation is fast-changing and complex to assess, and no predictions can be made on future developments, potential impacts on the Group or whether trade restrictions may impact the Group more severely than main competitors."
Volvo Group manufactures all of its vehicles for the US market in the United States but tariffs could affect components used in production.
The company said it had reduced its full-year forecast for heavy duty truck sales in the United States by 25,000 to 275,000, while keeping its outlooks for Europe and China unchanged.
Volvo Group's net profit during the first quarter fell to 9.98 billion kronor ($1.03 billion), down from 14.1 billion kronor in the same period a year earlier, and largely in line with predictions of analysts consulted by Bloomberg.
Operating profit fell by 27 percent to 13.2 billion kronor a year earlier, with operating margin shrinking from 13.8 to 10.9 percent.
Net sales fell by seven percent adjusted for currency movements to 121.8 billion kronor, while truck deliveries fell by 12 percent in the quarter.
Volvo Group said the uncertainty surrounding trade tariffs and US emissions legislation had caused US customers "to adopt a wait and see approach".
Order intake was nonetheless up by 13 percent in the quarter to 55,227 trucks.
Source: AFP
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