Lower demand in the mining sector hit sales of Volvo CE’s larger and more expensive products.
Volvo Construction Equipment saw a 7% fall in revenue in Q3 of 2013, with sales negatively impacted by lower activities in the global mining industry, and fluctuations in the Swedish Kroner affecting profits. When adjusted for currency movements, net sales were down by 5% during the period.
Positive developments in the quartwe included efficiency enhancements in its global industrial system, cost control measures and an inventory level that is in balance with demand, which helped the company record a positive operating margin of 4%.
Globally, construction machinery manufacturers are being affected by the down-cycle in the mining industry, sluggish demand in Europe and China, and continuing economic uncertainty.
Lower demand in the mining sector hit sales of Volvo CE’s larger and more expensive products.
“While there is still no clear sign of a global market recovery in the construction equipment sector, we did see an uptick in China, driven by sales of smaller equipment, and a slight increase in the European market,” said Pat Olney, president of Volvo CE until the end of the year.
“Our base scenario for 2014 is that the markets will remain at largely the same level as we have seen in 2013.”