Robust second quarter for Volvo Construction Equipment
Sales increase by 15% and company strengthens its position in the Chinese market
CONTINUED momentum in most markets in the second quarter of 2012 saw Volvo Construction Equipment post strong earnings and strengthen their position in the Chinese wheel loader and excavator market.
In the face of a reduction in the size of the total market for construction equipment, Volvo CE reported a 15% increase in sales in the three months to the end of June, a 35% increase in operating income and an operating margin of 13.3%.
The period also saw the company strengthen its market position in wheel loader and excavator sales in China, taking a 14.7% share of this key market.
Despite a downturn in the Chinese market, which declined by 38% during the quarter, Volvo CE say their sales at were positively impacted by strong momentum in most other markets, particularly North America, and a favourable product and geographic mix.
Net sales in the second quarter rose by 15%, to SEK19,715 million, while operating income increased by 35% to SEK2,629 million. This had a positive impact on operating margin, which jumped to 13.3% from 11.3% in the same period in 2011.
Volvo CE say the value of their order book at the end of the second quarter was also higher, up 14% compared to the same date in 2011.
Commenting on the results, Pat Olney, president of Volvo CE, said: ‘Sales growth continued to be robust during the quarter, most notably in North America where sales were up 89% compared to the same period last year.
‘In Asia we managed to offset a sharp decline in the overall market in China by continuing to gain market share, while demand in south-east Asia remained strong.’
Given the present global macroeconomic situation, Volvo CE say the rest of the year is uncertain from a volume and pricing point of view. For the full year 2012, Europe is now anticipated to be flat (previous forecast up 10–20%), while expectations regarding North America remain unchanged at growth of 15–20%.
Likewise, South America and Asia (excluding China) are expected to grow by 0–10%, as previously forecast, while China is expected to decline by 15–25%.
