Company also sees increase in order intake and delivery as European and Asian markets lead growth in 2017
Volvo Construction Equipment (Volvo CE) has reported a 30% rise in sales to $1.84bn in the first three months of 2017.
The Swedish giant said improving market conditions in all regions except South America helped it report strong growth in sales, profitability, order intake and deliveries in the first quarter of the year.
Operating income also rose by $38.7m to reach $183.5m on a 10% operating margin, which was a sharp rise from the 2.7% operating margin in the same period the year before. Volvo CE also enjoyed a 34% increase in order intake in the first quarter of 2017, with 17,487 machines ordered. This increase came from all markets, and particularly from China and Europe. Deliveries were also up 34% during the period, to 16,369 machines, the company said.
Volvo added that the construction equipment market continued to improve during the quarter, with all regions – with the exception of South America – showing growth. The European market was up 17%, driven by increased demand in Germany, the UK and France. North America was up 1%, with improvements in compact equipment and large excavators offsetting lower demand in other product areas. The total market in Asia, excluding China was 10% above the same period last year, boosted by improvements in India and Korea. There was also strong growth in Indonesia, driven by a recovering mining sector, while demand shrank in both Turkey and the Middle East.
China, meanwhile, continues to recover, with the market growing by 48% during the first quarter, compared to the same point the previous year. This is due to a surge in demand for excavators, which increased by 99% during the period, Volvo said.
Martin Weissburg, president, Volvo CE, said: “After years of tough market conditions, the Volvo CE business is growing again. Higher sales volumes linked with increased internal efficiency and a lower cost base helped us deliver good profitability levels during the quarter. Volvo CE is on the right track, the improvement plan is yielding results and there are further opportunities to improve the long-term competitiveness of the company.”