Second quarter sales at Volvo Construction Equipment increased +15% year-on-year to SEK 17,5 billion (€ 1,9 billion), despite the company being hit with supplier-related issues as a result of March's natural disaster in Japan.
Volvo CE said its operating income slipped SEK 186 million (€ 20,4 million) to SEK 1,9 billion (€ 209 million) after being impacted as a result of the earthquake and tsunami that hit Japan earlier this year.
The company said problems with Japanese suppliers resulted in lost sales of approximately SEK 1,2 billion (€ 132 million) and a reduction in operating income of SEK 300 million (€ 33 million). This also had a negative impact on operating margin, which stood at 10,8% - down from 13,6% in the same period in 2010.
Volvo CE president and chief executive Pat Olney said, "These are a solid set of figures given the significant currency headwinds we faced and the consequences of the tragic earthquake and tsunami that struck Japan during the period."
Volvo CE's business was boosted by a growing presence in the Chinese equipment market. Volvo said it had an 11,8% share of China's wheeled loader and excavator market at the end of the second quarter.
However, while the company said it expected strong growth in the Chinese construction equipment market this year (between +10% and +15%), this forecast was lower than the +20% to +30% growth that Volvo had forecast for the region earlier this year.
Indeed, the company revised its global construction equipment growth forecast downwards to between +15% and +25% this year, compared to the previous forecast of +20% and +30%.
Europe is expected to grow by +15% to +25% (previous forecast +10% to +20%) and the whole of Asia is expected to see +10% to +15% growth this year (previous forecast +10% to +20%).
The forecast for the US was unchanged at +25% to +35%, while South America's construction equipment growth was forecast to increase from between +5% and +15% this year to +10% to +20%.