Truck maker Volvo Group (VOLVY.PK) reported Friday a loss for the third quarter, reflecting mainly a 31% fall in sales due to weak demand for new vehicles and machinery in most of its markets, despite lower costs and expenses incurred during the period. However, the company noted that there are some positive signs indicating that the decline in demand has bottomed out and is now beginning a gradual recovery. The Swedish company's loss for the quarter attributable to equity holders of the parent was SEK 2.92 billion or SEK 1.44 per share, compared to an income of SEK 2 billion or SEK 0.98 per share in the previous year.
Net sales for the quarter dropped 31% to SEK 48.48 billion from SEK 69.78 billion in the same quarter last year. Adjusted for changes in exchange rates and acquired and divested operations, net sales declined by about 39%. The company noted that demand for new vehicles and machinery during the quarter remained weak in most of the Group's markets. Net sales from Industrial operations segment fell 32% to SEK 46.09 billion from SEK 67.46 billion a year ago. Adjusted for changes in exchange rates and acquired and divested units, sales decreased by 40%. Customer Finance sales decreased to SEK 2.78 billion from SEK 2.84 billion in the prior year. Cost of sales declined to SEK 40.91 billion from SEK 54.65 billion in the earlier year. Research and development expenses decreased to SEK 2.96 billion from SEK 3.43 billion in the preceding year.
The company posted an operating loss of SEK 3.29 billion for the quarter, compared to an operating income of SEK 3.18 billion last year. According to the company, operating loss for the third quarter was significantly reduced from the second-quarter operating loss of SEK 6.88 billion mainly due to lower sales and low cost coverage in its Industrial systems.
For the nine-month period, the company's loss attributable to equity holders of the parent was SEK 12.72 billion or SEK 6.27 per share, compared to an income of SEK 11.3 billion or SEK 5.58 per share in the prior-year period. Net sales for the period significantly declined to SEK 158.56 billion from SEK 226.65 billion in the preceding year.
Leif Johansson, president and chief executive officer said, "We are well positioned for the new emission regulations that will come into effect over the next few years, with products and services at the absolute forefront. For this reason, I remain highly confident that with hard and dedicated work we will be able to strengthen our position in the markets globally. The last year has been very challenging for everyone in the Group."
The Volvo Group is one of the leading suppliers of commercial transport solutions providing products such as trucks, buses, construction equipment, drive systems for marine and industrial applications as well as aircraft engine components. The Group also offers its customers financial services.
VOLVY.PK closed Thursday's regular trading at $9.81 on the OTC.
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