Swedish truck maker AB Volvo on Friday posted a near 1.7 billion kronor ($236 million) net profit for the first quarter, boosted mainly by extensive cost reductions as well as improved productivity, according to AP. The result compared with a loss of 4.2 billion kronor in the same three months a year ago and was the first time in more than a year it posted a profit. The Goteborg-headquartered group, maker of Volvo, Mack, Renault and UD trucks, said revenues also helped bump up bottom-line figures, with sales reaching 58.6 billion kronor in the period ended March 31, up from 56. 1 billion kronor for the same quarter in 2009. Volvo CEO Leif Johansson said his company now has «every reason to be optimistic about the future,» noting all of the business units were profitable in the period. He said cost cuts as well as improved capacity utilization were the main drivers, but noted that the services and aftermarket business «shows signs of recovery» and that Volvo has also been able to keep the prices on its products at good levels. «Looking ahead, we will focus on utilizing the rising sales volume to increase productivity in all of the group's operations while maintaining a strict focus on costs,» he said. For its key truck unit, Volvo reiterated its market forecast, predicting it to grow 10 percent in Europe and 20-30 percent in North America for the full year 2010. The European market is showing signs of improvement, with a higher order intake for new trucks and stronger demand for used trucks. The gradual improvement is expected to continue, it said. The demand for new trucks in the North American market stayed low in the quarter, but is expected to improve in the second half of 2010. Demand for used trucks in that market has increased, it said. Volvo, which also makes buses, engines and construction equipment, sold its car division to U.S.-based Ford Motor Co. in 1999. Ford has now agreed to sell that brand to China's Geely Group.
