Annual Volvo report shows Volvo Penta figures

by IBI Magazine on 13 Mar 2007 The Volvo Group has released its annual report for 2006, noting a seven per cent increase in net sales to SEK 248 billion for the financial year.

Earnings per share advanced 25 per cent to SEK 40.20 per share, while operating income for the period increased by 24 per cent to SEK 16 billion. The company noted the strongest increase in net sales in its construction equipment sector, and Eastern Europe accounted for the biggest growth in net sales by market area.

Volvo Penta, the company's marine business unit with four per cent of the group's net sales, noted sales of SEK 10.5 billion and an operating income of SEK 1 billion - the highest ever in Volvo Penta's history.

In its report the company states that Volvo Penta continued to capture market shares in most areas of its operations, particularly the inboard market, in which the volumes for Volvo Penta IPS increased steadily. At year-end, there were slightly more than 100 boat models from the world's largest boatbuilders with the new drive system.

Volvo notes that the total European market for marine as well as industrial engines was strong in 2006, recording net sales of SEK 5.82 billion in Europe, up from SEK 5.10 billion in 2005. The total market for marine engines weakened slightly in North America, down to SEK 2.82 billion in sales from SEK 2.83 billion in 2005, while demand for industrial engines was more stable. The total market in Asia remained weak at SEK 1.36 billion, down from SEK 1.43 last year, due primarily to the low demand for diesel gensets in China. In contrast, the development of markets in other parts of the world was positive, for example, Turkey and South Africa.

To meet the increased demand for its own-developed D4 and D6 marine engines, Volvo Penta invested SEK 100 million in its Vara plant, which resulted in an increased capacity to about 18,000 engines annually. During the past five years, Volvo Penta has invested about SEK 800 million in the plant, more than doubling production and the number of employees.

Having achieved shorter lead times, an increased capacity at Vara, an improved operating income and strengthened its market share in the inboard segment, Volvo Penta is aiming for increased growth and a strong focus on profitability for 2007.

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