Volvo CE sales up two thirds as profitability returns
By Chris Sleight22 July 2010
Volvo Construction Equipment's revenues leapt +67% in the second quarter of the year to SEK 15.3 billion (US$ 2.07 billion), compared to SEK 9.15 billion (US$ 1.24 billion) for the same period last year. The division made an operating profit of SEK 2.09 billion (US$ 283 million) in the quarter compared to a loss of SEK 1.26 billion (US$ 171 million) last year.
Volvo attributed the strong recovery to a +63% surge in demand from Brazil, Russia India & China (the BRIC countries). This was well ahead of the global trend of a +43% rise in construction equipment demand. The market in Europe was up +20%, Asia, North America was up +9%, Asia was up +60% and demand in other countries was up +77%.
Volvo's sales in all territories outstripped the rise in demand. In Europe for example its sales were up +33% on the same time last year to SEK 4.56 billion (US$ 617 million). In its biggest market, Asia, sales more than doubled compared to last year to SEK 7.13 billion (US$ 965 million). In North America meanwhile, its revenues rose +15% to SEK 1.76 billion (US$ 238 million), while in South America sales were up +82% to SEK 1.08 billion (US$ 147 million).
The company said that it saw most markets recovering this year, albeit from the very low levels of 2009. It now forecasts a +10% rise in Europe, and a +5% to + 10% rise in North America, while Asia is expected to keep leading the way with a +30% to +40% rise in demand.