Volvo CE sees record quarter despite mixed markets

26 April 2012

Volvo Construction Equipment CEO Pat Olney

Volvo Construction Equipment CEO Pat Olney

Volvo Construction Equipment's sales for the first quarter were up +17% to a record SEK 18 billion (US$ 2.67 billion). Operating profits were up +21% to SEK 2.13 billion (US$ 316 million) to give the company an operating margin of 11.8%. Volvo said its profits and margin were the best it had ever achieved in a first quarter.

According to Volvo, this result was achieved against a mixed market backdrop. It said that between December and February, the market in unit terms in Europe was up +16%, while North America grew +35% and Asia (excluding China) rose +24%. However, the South American market was flat, with only +3% growth and demand in China was -26% lower than the same period last year.

Volvo said that despite difficult market conditions, its sales in China were unchanged compared to a year ago. This saw its market share, which includes machines sold by its subsidiary Lingong under the SDLG brand, grew to 13.7% on a rolling 12-month basis. The company's forecast for the year is that Chinese equipment demand will fall by between -15% and -25%.

Forecasts for the rest of the world are more up-beat. Sales in Europe are expected to grow by between +10% and +20%, North America will see +15% to +25% growth and both Asia (excluding China) and South America could be up by as much as 10%, although the lower end of the forecast is for zero growth.

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