STOCKHOLM: Swedish truck maker AB Volvo reported a bigger-than-expected rise in fourth-quarter adjusted operating profit on Friday and said it had adjusted production levels and upped prices to compensate for cost inflation.

The sector and investors alike have braced for a tougher 2024 for the trucking market with Volvo expecting fewer trucks to be registered this year than the year before and analysts flagging a downturn in demand in Europe.

On Friday, Volvo cut its predictions for the total European heavy truck market this year, seeing 280,000 units for the region instead of 290,000.

However, kept its 290,000 prediction for the North American heavy truck market.

It also upped its prediction of the China medium and heavy truck market to 800,000 from 700,000 units previously.

Operating profit adjusted for divestment costs came to 18.4 billion Swedish crowns ($1.76 billion), above the mean forecast of 17.2 billion Swedish crowns in an LSEG poll of analysts.

Volvo proposed an ordinary 2023 dividend of 7.50 crowns per share, up from 7.0 crowns in 2022. This is in addition to an extra dividend of 10.50 crowns per share, up from 7 crowns a year earlier.

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The overall proposed dividends of 18 crowns was above the total payment of 17 crowns per share expected by analysts.

“We successfully mitigated cost inflation with price management, handled disturbances in the supply chain and reduced inventories,” Volvo CEO Martin Lundstedt said in a statement, stating he saw demand normalising across several markets and segments.