Volvo CE reduce losses in third quarter
DESPITE a decline net sales in the third quarter of 2009 due to continuing challenging market conditions, Volvo Construction Equipment say efficiency measures contributed to a 37% reduction in operating loss since the previous quarter.
Net sales in the third quarter declined by 38% to SEK8,176 million (£700 million) but the operating loss of SEK787 million (£67.4 million) was considerably below the SEK1,259 million (£108 million) experienced in the second quarter of 2009.
According to Volvo CE, the total world market for heavy, compact and road machinery equipment decreased by 42% in the third quarter of 2009 compared to the same period last year. In Europe the market was down by 54%, while the North American market decreased by 50% and Asia declined by 11%. Other international markets decreased by 61%.
The rapid flow of stimulus funding into China’s construction industry meant that it was one of the few bright spots in the industry during the period, increasing by 45% compared to last year, and helping bolster the situation in Asia.
‘Tough market conditions continue in the sector, but there are some positive signs indicating that the decline in demand may have bottomed out and that we are now beginning a gradual recovery,’ commented Olof Persson, president and chief executive officer of Volvo Construction Equipment. ‘But we are not relying on a substantial recovery and will therefore continue to improve efficiency and adjust our costs to current demand.’
The outlook for the full year is expected to see both the European and North American markets down by 50% during 2009, compared to last year, while the rest of the world is forecast to see a reduction in demand of 40–50%.
‘I am confident of improving our market position globally as we are well positioned for the new emission regulations that will soon come into force, with new products and services at the absolute forefront,’ added Mr Persson.
Net sales in the third quarter declined by 38% to SEK8,176 million (£700 million) but the operating loss of SEK787 million (£67.4 million) was considerably below the SEK1,259 million (£108 million) experienced in the second quarter of 2009.
According to Volvo CE, the total world market for heavy, compact and road machinery equipment decreased by 42% in the third quarter of 2009 compared to the same period last year. In Europe the market was down by 54%, while the North American market decreased by 50% and Asia declined by 11%. Other international markets decreased by 61%.
The rapid flow of stimulus funding into China’s construction industry meant that it was one of the few bright spots in the industry during the period, increasing by 45% compared to last year, and helping bolster the situation in Asia.
‘Tough market conditions continue in the sector, but there are some positive signs indicating that the decline in demand may have bottomed out and that we are now beginning a gradual recovery,’ commented Olof Persson, president and chief executive officer of Volvo Construction Equipment. ‘But we are not relying on a substantial recovery and will therefore continue to improve efficiency and adjust our costs to current demand.’
The outlook for the full year is expected to see both the European and North American markets down by 50% during 2009, compared to last year, while the rest of the world is forecast to see a reduction in demand of 40–50%.
‘I am confident of improving our market position globally as we are well positioned for the new emission regulations that will soon come into force, with new products and services at the absolute forefront,’ added Mr Persson.
