Volvo Cars Q1 Profit Down, Core Operating Profit Up; Sees Growth In FY24 Profit, Demand

(RTTNews) - Swedish luxury auto major Volvo Cars AB (VLVOF) reported Wednesday that its first-quarter net income fell 10 percent to 3.6 billion Swedish kronor from last year's 4 billion kronor.

Basic earnings per share were 1.12 kronor, down 7 percent from 1.21 kronor a year ago.

Operating profit fell 8 percent year-over-year to 4.7 billion kronor. However, Volvo Cars reported 8 percent increase in core operating profit to 6.8 billion kronor from prior year's 6.3 billion kronor. The corresponding EBIT margin came in at 7.2 percent, up from 6.6 percent a year earlier.

Revenue for the period came in at 93.9 billion kronor, down 2 percent from 95.7 billion kronor in the prior year. The drop was primarily due to lower revenue from contract manufacturing.

During the first quarter, retail sales rose by 12 percent year-on-year to 182,687 cars, with a new all-time sales record for a single month in March.

The company noted that a strong performance in Europe and the US contributed to the company's sales growth, and it recorded new sales records for the first quarter in 11 markets, including in Germany, France, the Netherlands, Canada and Turkey.

Fully electric car sales share was at 21 percent, higher than 18 percent last year.

Looking ahead for fiscal 2024, Volvo Cars said it remains firmly focused on achieving profitable growth and expects 2024 to be another solid year after the record year of 2023.

Volvo Cars expect a higher year-over-year growth rate in retail sales than in 2023, provided there are no major disruptions. The company is expecting to considerably increase the share of fully electric cars versus 2023.

Volvo Cars expects demand for its cars to remain robust in coming quarters and in line with its guidance of full-year sales growth of at least 15 percent.

The company also expects cash flow to improve in coming quarters which should enable it to be cash-neutral for the full year.

The company expects to achieve its ambitions of revenues of between SEK 550-600 billion and an EBIT margin above 8 percent during 2026.

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