Volvo Cars profit jumps on higher revenue, lower costs

STOCKHOLM: Carmaker Volvo Cars posted a sharp increase in third quarter profits on Thursday, as higher sales in the US and Europe and lower costs for raw materials boosted profitability.

The carmaker, which is majority owned by Chinese automaker Geely, reported an operating profit of 4.5 billion kronor ($400 million) for the third quarter — up from two billion kronor a year earlier.

“During the third quarter, we reported strong sales and revenue growth, which in combination with lower costs for raw materials and logistics, resulted in a solid underlying operating profit,” Jim Rowan, CEO of Volvo Cars, said in a comment.

Volvo Cars also saw a more than fourfold increase in net income for the period, reaching 3.2 billion kronor, compared to 665 million for the same period a year before.

Revenue rose 16 percent to 92 billion kronor, with the company reporting a 50 percent increase in the number of cars sold in the US, and a 34 percent increase in the number of cars sold in Europe.

At the same time, Volvo Cars reported a four-percent decrease in the number of cars sold in China.

The strong quarter put the company, which plans to ditch fossil fuel vehicles by 2030, on track to achieve “solid double-digit growth in retail volumes and a considerably higher share of fully electric cars for the full year,” it said.

“At the same time, uncertainties remain on the horizon, and we continue to be watchful,” Rowan said.