Volvo updates on Q4 operational performance

The Volvo Group has reported its operations for the fourth quarter of 2009.

The substantial costs in connection with its effort to adjust cost structure to a lower level of demand, has contributed to an operating loss of slightly around SEK2bn in the quarter.

According to Volvo, the main focus during the quarter was on cash flow and it created a positive cash flow of SEK8.6bn.

The company has reported that in Q4, net sales decreased by 23% to SEK59.8bn (78bn), and for the full year net sales decreased by 28% to SEK218.4bn (304.6bn). The Q4 operating loss amounted to SEK2,316m (Loss SEK 999m), including restructuring and layoff-related costs, residual value write-downs and inventory write-downs of in total SEK1.4bn. The full year operating loss amounted to SEK17bn (Income SEK15.9bn).

In addition, the Q4 operating cash flow in the industrial operations was positive in an amount of SEK8.6bn (1.8bn), and the cash flow was positively impacted by SEK5.6bn from a reduction of inventories. During the quarter, net debt in the industrial operations was reduced by SEK8.9bn.

Leif Johansson, president and CEO of the Volvo Group, said: "As we have left 2009 behind us, I can say that although demand remains at historically low levels, we have reduced our cost base significantly, we have reduced our inventory and lowered our capital tied-up, and that we are financially stable thanks to low refinancing requirements combined with good liquidity. We have also continued to invest in research and development to be able to launch competitive products in the next few years."