Volvo Trucks Reports 2009 Operations

At the end of January, the Swedish trucks manufacturer has seen signs of increased demand, meaning that they were able to reduce stocks and increase production. But in the fourth quarter Volvo had to adjust costs to a considerably lower level of demand, which contributed to an operating loss of $0.27 billion. The company managed to create a positive cash flow of $1.18 billion, which is one of the best cash inflows ever for a single quarter.

• In the fourth quarter net sales decreased by 23% to $6.97 billion. For the full year net sales decreased by 28% to $29.91 billion.

• The fourth quarter operating loss amounted to $0.32 M (Loss $136.8 M) including restructuring and layoff-related costs, residual value write-downs and inventory write-downs of in total $0.19 billion. The full year operating loss amounted to $2.33 billion (Income $2.18 billion)

• In the fourth quarter basic and diluted earnings per share amounted to a negative $0.14 (Negative $0.09). Full-year earnings per share amounted to a negative $0.99 (Positive $0.67)

• In the fourth quarter, operating cash flow in the Industrial Operations was positive in an amount of $1.18 billion. Cash flow was positively impacted by $0.77 billion from a reduction of inventories

• During the quarter, net debt in the Industrial Operations was reduced by $1.22 billion

• The Board of Directors proposes that no dividend is distributed for the year 2009 ($0.27 per share)

”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. Therefore I have a very positive view on the Group’s possibilities to strengthen its positions on the world market.” Leif Johansson, President and CEO.