Swedish automotive and heavy equipment manufacturing company Volvo on Tuesday (25 April) reported an impressive jump in first-quarter net profit beating analyst expectations. The company's adjusted operating profit rose to 7.03 billion Swedish krona (£618m, $793m) in the first quarter from 4.46 billion Swedish krona a year earlier.
Rise in truck orders and good performance in its construction equipment business attributed to the profits. Sales for the period ended March 31 rose by 8%.
Cash outflows increased by 32% to 20,346 million krona as the Gothenburg-based firm pursued investment and expansion opportunities throughout the year. Overall cash inflow increased by 51% to 38,635 million krona.
"The result was a third consecutive year of record sales, with over 534,000 units sold. Revenue grew by 10 per cent, resulting in a significantly increased operating profit of 11 BSEK", said Hakan Samuelsson, President and CEO of Volvo.
"I am particularly pleased that we managed a positive cash flow despite ongoing heavy investments in future products and technologies. This is a good reflection of all of our employees' strong efforts throughout the year."
Samuelsson also elaborated on the firm's "three pillars" strategy in joining the autonomous driving cars market. Firstly, Volvo has collaborated with Uber to manufacture cars with the necessary backup systems required for autonomous driving. Secondly, the firm has also entered into joint venture projects with car components manufacturer Autoliv and autonomous driving technology firm Zenuity to develop the requisite software. Lastly, Volvo is also contemplating a large scale vehicle test scheme under the 'Drive Me' initiative.
The CEO further added that Volvo has launched the 'Omtanke' sustainability programme which aims to supply 1 million electrified vehicles to the road by 2025.