Volvo Group increases net sales by 12% in Q2 2017

Volvo Group increases its net sales to $10.6bn in Q2 2017, grew its adjusted operating income to $1bn for an operating margin of 9.7%, and saw at least one major sale in Saudi Arabia

The Volvo FMX has proved popular in the Middle East.
The Volvo FMX has proved popular in the Middle East.

The Volvo Group has increased its net sales by 12% to $10.6bn (SEK 88.4bn) in Q2 2017, and improved its adjusted operating income to $1bn (SEK 8,540m), corresponding to an operating margin of 9.7%.

“The Volvo Group increased both sales and profitability during the second quarter when compared with the second quarter last year,” said Martin Lundstedt, President and CEO.

“The profitability continued to develop positively and all our business areas improved their operating income, while cash flow in the industrial operations was also strong and amounted to $1.4bn.”

In the Middle East, the quarter notably saw the purchase of a mixed fleet of 250 Volvo FH and FMX trucks by the Dammam, Saudi Arabia-based Al-Osais International Holding, in spite of the serious slowdown affecting heavy commercial vehicles sales across the country.

According to one recent estimate, the volume of heavy truck sales in Saudi Arabia contracted from around 10,000 units in 2015 to 5,000 units in 2016, and contracted by a further 40% in H1 2017.

The quarter also saw Volvo Group entity UD Trucks launch the UD Croner – a medium-duty truck range for emerging markets – in the Middle East, following a regional launch event in Dubai, UAE.

To read more on this, see the full PMV write-up: Japan time: curtailing downtime with UD's medium-duty Croner

Adjusted for currency movements and acquired and divested units, sales increased by just 6%, with currency movements having a positive impact on operating income, to the value of $42m (SEK 350m).

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