Second quarter 2015 revenues rose 5 percent for Volvo Construction Equipment and profitability surged 80 percent, despite significant declines in some major markets. The company’s earnings were positively impacted by currency and a favorable product mix.
Revenue in North America jumped 29.9 percent for Volvo CE, while the company enjoyed a 4.8-percent hike in Asia. Europe was essentially flat, while sales slumped 31 percent in South America.
Ongoing efficiency measures also had an impact on the company’s improved second quarter performance. Volvo posted its best profit margin in the past three years, even though deliveries decreased by 24 percent in the second quarter, primarily driven by lower demand in China and Russia, impacting both the Volvo and SDLG brands.
Net sales in the second quarter totaled SEK 15.419 billion (about U.S. $1.78 billion), compared to SEK 14.624 billion in the same period a year ago. Operating income leapt 80 percent to SEK 1.353 billion, compared to SEK 751 million a year ago. Operating margin, 8.8 percent, was significantly improved compared to 5.1 percent a year ago.
“The second quarter saw Volvo CE continue its targeted sales activities and the implementation of the restructuring program we launched in 2014,” said Martin Weissburg, president of Volvo Construction Equipment. “With the exception of North America, demand was down across the board, resulting in a decline in equipment deliveries by almost a quarter. That said, our products are well received by the market and operating margin improved significantly during the quarter.”