Geely's Volvo Cars boosted operating profit 27.7% year on year to a record SEK14.1bn following global sales of 571,577 cars.
Net sales rose 16.6% to SEK210.9bn compared with SEK180.9bn in 2016 while operating profit margin improved from 6.1% in 2016 to 6.7% in 2017.
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"The results underline the comprehensive transformation of Volvo's finances and operations in recent years, positioning the company for its next growth phase," the automaker said in a statement.
Global sales rose 7% during the year, underpinned by a 25.8% increase in China, the company's largest individual market.
"Our business has transformed completely since 2010 and we are now gearing up for a phase of global, sustainable growth," said president and chief executive Hakan Samuelsson.
"We are investing in all parts of our organisation and have laid out clear strategies around electrification, autonomous drive and connectivity."
Earlier this week, Volvo's performance division turned 'electric car performance company' Polestar named Hans Pehrson head of R&D and electric propulsion strategy.
