Second-quarter profit for the Sweden-based truck and engine manufacturer Volvo Group rose 59% from a year ago, according to numbers released on July 19.
Net income totaled 9.22 billion Swedish kronor ($1.04 billion) compared with SEK5.81 billion a year earlier, beating analysts' expectations, according to Bloomberg.
Net sales increased by 18% to SEK 103.6 billion, while adjusted for currency movements, and acquired and divested units sales increased by 16%.
This is the first time that Volvo Group’s sales have exceeded SEK 100 billion in a single quarter. It is also the first time the operating margin rose above 10%, according to Martin Lundstedt, Volvo Group president and CEO.
“Our truck business had a good sales development and increased profitability despite a continued stretched situation in parts of the supply chain, primarily in North America,” Lundstedt said. “Truck deliveries increased by 14% and net sales by 16% to SEK 65.2 billion. All truck business areas improved their profitability, which contributed to increasing the operating income to SEK 7.2 billion with an operating margin of 11.1%.”
He also said that demand in the European truck market continued to be on a good level with high freight activity. In North America, demand increased strongly, primarily driven by growth in the highway segment.
In North America, order intake increased by 63% in the second quarter to 15,860 units compared to 9,720 a year earlier. Volvo said there was a continued good demand for construction trucks and a particularly strong development in the highway segment. Deliveries were up 32%, to 14,114 trucks.
Volvo Trucks increased its North America market share to 10.9% as of June from 8.8% a year earlier, but Mack Trucks’ market share declined to 6.9% from 8.2% in the second quarter of 2017.
Volvo Group also reported increased overall sales in its construction equipment and marine business segments, while sales of its buses was around the same level as a year earlier.