Analysis: "Full speed ahead - into the fog"

"Full speed ahead!".

With that battle cry, the truck manufacturer Volvo's CEO Martin Lundstedt ended his draw on the profit for the stock analysts this morning.

Sure, Volvo makes less money than last fall, but still terribly much more than was thought to be possible this spring, when the pandemic hit hardest both medically and financially.

And much more than stock analysts expected, as recently as last night.

Since the turn of the year, when the pandemic broke out, profits have more than halved.

And since last autumn, more than 9,000 employees have lost their jobs at Volvo.

But in the third quarter, the decrease in profit after net financial items was not even 25 percent.

And now the company is hiring people.

Party atmosphere at Hisingen

But the strongest indication that there is a party atmosphere at Hisingen is probably still that Volvo has started making forecasts about the future again.

Volvo was one of many listed companies that completely stopped doing so when the corona crisis broke out and the world shut down.

Visibility was zero, as they put it.

Now the factories are up and running.

Trucks are ordered and delivered, and not least the customers drive around with them, which is one of the most important reasons for the company management's increased optimism, judging by how it sounded at the telephone conference with stock analysts.

And Volvo has just as much money as before the crisis - SEK 62 billion in net financial assets.

The taxpayers have been a great help.

Volvo has received more than 1.3 billion in government redundancy support in Sweden alone.

It happens to be almost as much as the profit in the third quarter exceeded the expectations of equity analysts.

Volvo has now completed the layoffs.

The question of whether it is right for Volvo to seize billions of tax money in the corona crisis is likely to come up for debate.

First out was - a stock analyst.

At this morning's conference call, he asked if it would not be wise, or sensible, to repay the aid.

The Volvo boss cut to call the issue "populist".

He then explained that the support was created by politicians with the aim of avoiding mass redundancies, and that the whole economy could start up easier and faster after the crisis, if the companies, thanks to the support, kept their employees.

Alarming increase

Everything is pretty much true.

The intention on the part of the government was to save jobs, even at the cost of tax subsidies to companies with a billion profit.

On the other hand, distributing money to shareholders and at the same time receiving support was banned after SVT's review this spring.

So Volvo's shareholders, who had been promised SEK 27 billion in dividends this year, will have to wait until next year.

Or possibly even longer, judging by the latest news from the Swedish Agency for Economic and Regional Growth that profits created at the same time as receiving corona support might not be distributed next year either.

But more important for the shareholders - and the employees - in the long run is, of course, how the economy will actually fare in the corona crisis.

More companies than Volvo will probably show unexpectedly good figures when they report their results in the near future.

Today Sandvik came with his, also better than expected.

But.

There is alarming news about increased spread of infection in several of Sweden's most important export countries.

Brexit negotiations are underway and the US presidential election will lead to anything.

So that sight that was zero before, can hardly be called clear.

Rather, it is about "Full speed ahead" - into the fog.