Volvo on Tuesday reported first-half results and said its business is expected to recover in the second half of the year. But the company posted an operating loss in the first half of the year as the novel Coronavirus blockade restrictions strained the supply chain and forced the closure of the plant.

Meanwhile, Volvo's merger with Geely has been put on hold because of geely's plans to list in China, and the two companies will resume talks in the autumn.

Volvo reported a 14 percent drop in revenue to 111.8 billion Swedish kronor in the january-June period and an operating loss of 989 million kronor, compared with a profit of 5.52 billion kronor in the first half of last year. First-half sales fell 20% to 270,000 vehicles, but sales of plug-in hybrids and SUVs rose more than 75% during the same period.

Business in China has rebounded and is on track to recover in the second half of the year

Novel Coronavirus epidemic has dealt a heavy blow to global consumer confidence and corporate cash flow, especially to the automotive industry. In the first half of 2020, Volvo's new-car sales in its European home market slumped 38 percent, while sales in China and the United States fell more than 25 percent. But Volvo is confident about the second half of the year, driven by sales of plug-in hybrids in Europe and the US.

Volvo returned to strong growth in China in the second quarter and expects a similar upturn in the US and Europe, the company said. Based on the extent of the current market recovery, the company has resumed production at all of its plants except the one in Ridgeville, South Carolina.

Chief Executive Hakan Samuelsson said in a statement: If the market recovers as expected, Volvo sales are expected to return to the levels seen in the second half of 2019, and we hope to return to similar levels of profit and cash flow.

Plug-in hybrids now account for nearly a quarter of Volvo's sales in Europe and about 10 per cent in the US. The company expects the next recovery to occur in plug-in hybrids.

Meanwhile, the Chinese market has recovered in spite of losses in the first half of the year, and the company expects its annual sales volume to be slightly below the previous year's target.

Volvo issued a profit warning in March, saying its business had been hit by the outbreak and that sales, earnings and cash flow would fall in the first half of the year from a year earlier. The company then announced plans in April to cut 1,300 white-collar jobs in Sweden.

The listing plan has been repeatedly thwarted, and the merger with Geely has been put on hold

Novel Coronavirus outbreak sashes another attempt to get Volvo to market. Geely bought Volvo from Ford in 2010. Volvo now plans to merge with Geely and list in Hong Kong and Mainland China. The company also plans to list in Stockholm if possible. But two years ago, Volvo abandoned plans for a separate listing.

In 2018, Volvo issued and sold "preferred shares" to two Swedish pension funds and an insurance company that could be bought back by Volvo or converted into "listed ordinary shares" by "major shareholders" themselves. "This is another step in Volvo's long-term goal of moving forward with its listing," Volvo said ambitiously.

However, Geely has been trying to join Shanghai's new technology index. The company said last month that its board had approved a preliminary proposal to list renminbi shares on the Shanghai Stock Exchange. As a result, plans to merge the two companies have been put on hold to facilitate the regulatory approval process.

In response, a Volvo spokesman said geely could not discuss a potential merger between the two companies because it was preparing a technology and innovation listing. Negotiations will resume once Geely completes its activities related to this.