Volvo CE reports strong Q3 performance
Recoveries in Asia and Russia help sales increase 34% as operating income jumps 237% year-on-year
Volvo Construction Equipment (Volvo CE) has posted strong results for the third quarter of 2017, with market share gains in key segments coupled with good cost control and growing demand in most regions.
The Swedish equipment giant said in a statement that its sales for the quarter rose by 34%, order intake went up 45% and deliveries increased by 48%. There was also a strong improvement in profitability.
Adjusted for currency movements, net sales in the third quarter increased by 34% to $1.8bn. Operating income was also strongly up, jumping 237% to $247m, up from $73.5m in the corresponding period in 2016. This represented a significant step up in operating margin, to 13.4%, as compared to the 5.2% of the corresponding period a year ago, the statement said.
Profitability was positively impacted by higher sales, improved capacity utilisation in the industrial system and again from the sale of Volvo CE’s dealership in Great Britain, it added.
Net order intake in the third quarter increased by 45% compared with the same quarter in 2016. This increase was largely driven by higher intake from China, as well as growth in other Asian markets and Russia. Deliveries increased by 48%, to 14,431 machines.
Volvo said that up to the end of August, the European market was up 15%, driven by the growth in the UK, France and Italy. The German market is slightly above last year, while the recovering Russian market is up 101%. North America is 7% above last year, due to growth in demand for excavators, both compact and larger general-purpose machines.
The South American market is 6% above last year but remains at very low levels. In Asia (excluding China) the total market is 12% above last year, with continued growth in India and Indonesia, helped by a recovering mining sector. The Chinese market is 74% above last year, with strong recoveries in both excavators and large wheel loaders.
“This is an especially strong performance. Volvo CE has responded well to the growing demand, with volume increases up 48%, while at the same time taking a significant step up in profitability,” said Martin Weissburg, president of Volvo CE. “We also continue to gain market share within our product and market strongholds.”
During the quarter Volvo CE produced its 75,000th articulated hauler. The company claims to have produced more than half the articulated haulers ever made, with about 50,000 Volvo haulers still in regular use around the world.
