Stockholm - Swedish heavy-vehicle maker Volvo on Wednesday reported a 25 per cent increase in pre-tax income for second quarter 2008, citing strong growth in Eastern Europe, South America and Asia. Pre-tax income was 7.48 billion kronor (1.25 billion dollars), compared to 5.97 billion kronor in the corresponding period 2007 for the Volvo group, excluding the Ford-owned car division.
Net sales were up 13 per cent to 80.4 billion kronor, compared to 71 billion kronor in the corresponding business period 2007 while net income increased 28 per cent to 5.1 billion kronor.
Operating income was 7.18 billion kronor which was the group's "highest level to date for a single quarter," Chief Executive Leif Johansson said in a statement.
"Markets in North America and Japan remained weak," Johansson said, adding that Volvo maintained its forecast that the European truck market will grow 10 per cent, while the North American truck market will stay on the same level as 2007.
For the US, Volvo cited factors like the weaker economy, high fuel prices and a slow down in the housing construction sector.
During the quarter, the group delivered 69,754 trucks, up 24 per cent compared to the corresponding business quarter 2007.
Order bookings fell 54 per cent in Europe, partly due to increased uncertainty about the European economic development, higher fuel prices and lower activity in the housing and construction sector, Volvo said.
The bus division sold 2,525units, up 10 per cent on second quarter 2007, Volvo said, adding that order bookings were up 26 per cent.
The group sells trucks and heavy vehicles, buses and construction machinery, and includes the divisions Volvo Aero and Volvo Penta.
At the end of the quarter, Volvo Aero signed two deals with Pratt & Whitney and Rolls-Royce to build and develop engine components.
