Swedish truck maker Volvo dumps dividend payment as Q1 net sales slide 16%

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Swedish truck maker Volvo dumps dividend payment as Q1 net sales slide 16%

On Tuesday, the 12th of May 2020, the Gothenburg-based Swedish multinational manufacturer of high-end trucks, buses and construction equipment, the Volvo Group had issued a statement saying that the company would suspend its proposed dividend pay offs for 2019, citing the move as a precautionary measure given the scale of uncertainty sprung from the pandemic outbreak, joining a string of businesses which had already ditched out dividend pay offs due to a grievous debarkation of cataclysmic demand crunch.

As a matter of fact, although Sweden had partially lifted the pandemic-led lockdowns later last month, largely export-oriented economy of the Northern European nation appeared to have gained little benefits from the move, since a number of manufacturing HubSpots in Sweden have still been in an entire lockdown including those of Volvo’s.

Aside from that, Tuesday’s (May 12th) statement of the Swedish truck manufacturer came forth days after the company, which had long been an arch-rival to Germany’s Volkswagen and Daimler AG, had cautioned a steep decline in truck orders alongside a bleaker demand outlook, nevertheless, the Volvo Group had beaten an analysts’ estimate for its Q1, 2020, operational profit, even though the Group’s net sales had slipped by 16 per cent during its first quarter of the year that ended on March 31st.

Meanwhile, adding that the Volvo Group’s financial position was stronger-than-anticipated compared to a gloomier global business environment, the company said on its Tuesday’s (May 12th) statement, “The Board of Directors of AB Volvo has decided to withdraw the proposal to the Annual General Meeting for an ordinary dividend of SEK 5.50 per share and instead proposes that no dividend for 2019 will be paid.