STOCKHOLM, Sweden (April 23, 2003) — Swedish-based AB Volvo announced its second-quarter net profit jumped 59 per cent — thanks mainly to strong sales of new heavy trucks and construction vehicles in North America.

Analysts were impressed with Volvo’s strongly improved profitability and cashflow, and are especially encouraged by Volvo’s upbeat outlook for the truck market this year in both North America and Europe. “The biggest positive surprise was the truck division’s improvements in North America and the fact that even Renault trucks (a Volvo subsidiary) in Europe is doing well,” said Anders Trapp of Enskilda Securities in Stockholm.

Volvo’s truck operations, which account for roughly 35 per cent of total revenues, were more profitable because of cost savings, the company said. In North America, it’s also selling more models through common dealerships, which is also helping profits.

Market shares in North America through June improved to 10 per cent from 7.9 per cent, Volvo said, due mainly to high demand for its new Volvo VN model. The company said it expects industry-wide truck sales in 2003 of 200,000 trucks in Europe and 170,000 in North America. If there is any change at all to this forecast, Volvo said it will probably be due to higher demand, not lower.

— with files from Dow Jones Newswires