Volvo CE sales jump 24% in second quarter
BUOYED by higher volumes, Volvo Construction Equipment say their 2007 financial year continues to be characterized by strong growth in sales and profitability. Sales in the period rose by 24% and operating income increased by 10%, compared with the same period last year.
Net sales in the second quarter amounted to SEK14,146 million (£1.04 billion), up from SEK11,416 million (£839 million) in 2006. Operating income increased to SEK1,398 (£102.8 million) from SEK1,276 million (£93.8 million) during the same period in 2006. Volvo CE say the increase in income was largely due to higher volumes and high levels of capacity utilization. Operating margin was 9.9%, down from 11.2% in the second quarter last year.
The second quarter financial statement was the first to include the road development division of Ingersoll-Rand, which was acquired by Volvo CE in April this year. The new division had sales of SEK1,132 million (£83.2 million) and generated an operating income of SEK128 million (£9.4 million).
The second quarter of 2007 saw the total world market for construction equipment within Volvo CE’s product range increase by 10% compared to the same period in 2006. In North America the market declined by 12%, largely due to lower activity in the housing construction sector. However, this was offset by the European market, which increased by 13%, and the Asian market, which rose sharply (up 31%) buoyed by strong sales in China (+54%). Other markets also performed well, rising by 25%.
Volvo CE say the outlook for the second half of 2007 remains favourable. The European market is expected to grow by10% during the year, while Asia is expected to increase by around 15%, again largely driven by China. Other markets are also forecast to rise by 10%, while the North American market is predicted to decline by 10% but remain at a historically high level.