Sweden-based Volvo Construction Equipment (Volvo CE) has recorded second quarter revenues of SEK 13.63 billion (US$ 1.59 billion), representing a 12% decrease from the same period a year ago.

The company's operating income was was down 40% to SEK 810 million (US$ 94.25 million) for the second quarter of 2016.

Regionally, Volvo CE saw a drop of 46% in its South American sales to SEK 309 million (US$ 35.96 million), while its European sales rose 12% to SEK 5.70 billion (US$ 662.8 million).

The company said, "Demand for construction equipment continues to be weak in many markets. There is growth in the European market, flat development in North America but a continuing strong decline in South America.

"As of May the European market was up by 7%, mainly driven by a significant recovery in the French market."

It added that this growth was tempered by a slowdown in the UK, as well as further declines in Russia, from already low levels.

The overall performance from Volvo Group saw its sales decline 7% year-on-year in the second quarter of 2016 to SEK 78.9 billion (US$ 9.22 billion).

Nevertheless, the company’s adjusted operating income rose to SEK 6.13 billion (US$ 716.2 million) from SEK 5.98 billion (US$ 698.5 million) in the same period.

The figure beat the SEK 5.64 billion forecast from the Reuters poll of analysts, which was largely predicated on the continuing slump in demand for commercial vehicles from the US.

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