Volvo (MW): Yesterday evening Volvo stated that the current semiconductor shortage will have a quote “substantial” negative impact on production in Q2. The company will have to implement “stop days” across its production value chain, which could last between 2 and 4 weeks depending on the location. Volvo does not guide on the magnitude of earnings and/or cash flow impact, but using the word “substantial” in our view means at least a high single digit percentage and potentially even slightly higher than that. That said, Volvo has a very strong balance sheet being net cash on a reported level and we doubt that this would be large enough to entail negative rating pressure. Still the uncertainty is credit negative.
