Volvo CE halve operating losses in Q4 2009
DESPITE a further 12% drop in demand in the total world market in the fourth quarter of 2009, Volvo Construction Equipment saw adjusted sales decline by 6%, losses halved and inventory balanced to demand during the period.
Publishing their fourth-quarter and full-year results, Volvo CE said their efficiency measures were proving effective – reducing their loss for the quarter by 55% when compared with the same period in 2008. In addition, efforts to shrink dealer inventories were also successful, reducing them by 47% during 2009 – to a point where stock is now in balance with demand.
These figures come in the face of continued recession in the world market for construction equipment, which reduced by a further 12% during the fourth quarter of 2009 – making it a 39% drop for the full year.
Volvo CE sales were down by just 9% to SEK10,159 million in the period when compared with the year before, easing to 6% when adjusted for exchange rates. However, compared with the third quarter of 2009, sales showed an increase of 24%. Operating losses were reduced by 55% compared to the fourth quarter of 2008.
‘Despite the sharp decline in sales, our losses were limited due to effective cost-reducing measures and improved productivity,’ said Olof Persson, chief executive of Volvo CE. ‘Although sales are significantly lower than a year ago, it is becoming increasing clear that the state of the global economy is improving. China in particular strengthened considerably during 2009.’
For the full year 2009, Volvo CE’s sales were down by 37% to SEK35,658 million. This equates to sales of 38,783 machines, down from the 2008 peak of 63,641 units.
The company says the outlook for 2010 is uncertain, but is forecast to remain soft. North American and European markets are expected to rise by between 0–10% from their current very low levels, while Asia and other international markets are expected to grow by between 10–20%.
China, however, is expected to grow by 20% in 2010, and Volvo CE say they are committed to becoming a key player in the country. In December 2009 the company announced that it is to introduce four new SDLG branded crawler excavators into China by the end of 2010, to be built at Volvo’s Lingong facilities in Linyi, China.
Publishing their fourth-quarter and full-year results, Volvo CE said their efficiency measures were proving effective – reducing their loss for the quarter by 55% when compared with the same period in 2008. In addition, efforts to shrink dealer inventories were also successful, reducing them by 47% during 2009 – to a point where stock is now in balance with demand.
These figures come in the face of continued recession in the world market for construction equipment, which reduced by a further 12% during the fourth quarter of 2009 – making it a 39% drop for the full year.
Volvo CE sales were down by just 9% to SEK10,159 million in the period when compared with the year before, easing to 6% when adjusted for exchange rates. However, compared with the third quarter of 2009, sales showed an increase of 24%. Operating losses were reduced by 55% compared to the fourth quarter of 2008.
‘Despite the sharp decline in sales, our losses were limited due to effective cost-reducing measures and improved productivity,’ said Olof Persson, chief executive of Volvo CE. ‘Although sales are significantly lower than a year ago, it is becoming increasing clear that the state of the global economy is improving. China in particular strengthened considerably during 2009.’
For the full year 2009, Volvo CE’s sales were down by 37% to SEK35,658 million. This equates to sales of 38,783 machines, down from the 2008 peak of 63,641 units.
The company says the outlook for 2010 is uncertain, but is forecast to remain soft. North American and European markets are expected to rise by between 0–10% from their current very low levels, while Asia and other international markets are expected to grow by between 10–20%.
China, however, is expected to grow by 20% in 2010, and Volvo CE say they are committed to becoming a key player in the country. In December 2009 the company announced that it is to introduce four new SDLG branded crawler excavators into China by the end of 2010, to be built at Volvo’s Lingong facilities in Linyi, China.
