Higher sales lift Q4 profit for Sweden's Volvo Group

Feb 3, 2012, 9:10 GMT

Stockholm - Swedish heavy-vehicle maker Volvo said Friday its fourth quarter net profit had risen to 4.79 billion kronor (711 million dollars), driven by higher sales in most markets.

The Volvo Group - which doesn't include the car division - had reported a net profit of 3.4 billion kronor in the corresponding business period a year ago.

Net sales in the quarter increased 18 per cent year-on-year, to 86.5 billion kronor.

Volvo said it delivered 68,600 trucks in the fourth quarter, up 21 per cent year-on-year. However, orders declined 7 per cent in the quarter, to 57,700 trucks. The drop was more marked in Europe and Brazil.

'With the uncertainty in the European economy it is difficult to forecast demand for trucks in 2012,' said chief executive Olof Persson, adding that Volvo expected 'a gradual improvement as customers start to replace old trucks,' due to stricter emissions standards being implemented in Europe and Brazil.

To counter lower demand in Europe and Brazil, production rates had been lowered, but remained unchanged in Japan, India and North America.

The Volvo Group sells trucks and heavy vehicles, buses and construction machinery, and includes the divisions Volvo Aero and Volvo Penta. The Volvo car division is owned by Chinese group Zhejiang Geely Holding Co.

The group also sold 22,289 buses during the full year, up 19 per cent on 2010. Demand remained weak in Europe and North America however, the company said.

For full-year 2011, the company reported a 17-per-cent increase of net sales to a record 310 billion kronor. Net profit was 18.1 billion kronor, compared to 11.2 billion kronor in 2010.