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Volvo revs up profit

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Truck wheels in motion. File photo: Shutterstock
14:24 CEST+02:00
Swedish truck maker Volvo Group posted soaring first-quarter profits on Friday, citing a successful restructuring plan that had claimed some 4,400 jobs in the past year, many of them white-collar.

Net profits tripled compared to the figure a year earlier to 1.08 billion kronor ($165 million), close to the 1.16-billion-kronor expectation by analysts polled by Dow Jones Newswires.

Revenue rose by 12.5 percent to 65.65 billion kronor, slightly above the 65.38 billion kronor predicted by analysts.

"The measures that are being implemented to increase the group's profitability are running according to plan and are starting to have a positive impact on the gross margin and costs," chief executive Olof Persson said in a statement.

"But there is still more work to do in terms of cost reductions and this is the group's main focus for 2014."

The group announced 2,000 job cuts in October and another 2,400 in February, hoping to boost profitability. So far, 900 white-collar employees and consultants have been laid off.

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In December 2013, the group had 95,500 staff and 15,000 consultants worldwide. Volvo said it had launched a voluntary leave programme in Sweden and that similar measures would be applied in other countries during 2014.

Sales in the first quarter improved in North America, Western Europe and Japan, while "the emerging economies in South America and Asia saw weaker demand."

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