Volvo risks being split up if profitability does not improve - Dagens Industri
Volvo, the listed Swedish truck manufacturer, risks being split up if it does not improve its results, according to Dagens Industri.
The Swedish business daily cited a Handelsbanken Capital Markets analyst who said that Volvo now needs to show that the cost-cutting program, which the company initiated in 2012, is starting to take effect.
A Nordea Fonder asset manager agreed, saying that Volvo may risk being split up if it does not improve. He said further that Volvo needs to improve underlying profitability in 2016 to more than its reported results and that decreasing the instability of the company's results is necessary.
The paper also speculated whether Volvo's new CEO, Martin Lundstedt, will make structural changes to Volvo, such as spinning of its Construction Equipment unit. The Handelsbanken analyst said that this may well occur if things do not change and pointed out that Volvo's major shareholders Industrivarden and Cevian Capital may for push for it.
The item noted that Volvo's share price has dropped by around 30% comparing the 37% rise in the stock exchange during the last five years.
Dagens Industri