Volvo AB said Russia’s invasion of Ukraine required them to build up reserves of 4 billion crowns ($423 million) in the first quarter, lowering its operational profit.
Since the commencement of the conflict and the introduction of sanctions against Russia, all sales, services, and production of the Swedish truck manufacturer have been halted in Russia.
Volvo is rated A2 by Moody’s
Volvo has about NOK 9 billion in Russia-related assets, of which NOK 6 billion is classed as cash and is tied to its leasing business and is funded through the bond market.
“We will earn less money from clients since we expect customer credit losses to grow,” said business spokesperson Claes Eliasson, “but we will still pay the bonds when they mature.”
According to statistics provided by Bloomberg, Volvo is one of Sweden’s top issuers of corporate bonds, with around 107.6 billion kronor in circulation.
The firm has Moody’s rating of A2 and a Standard & Poor’s rating of A, making it a good investment.