Volvo Construction Equipment posted a 34-percent third quarter year-over-year sales increase with market share gains in key segments coupled with good cost control and growing demand in most markets. Order intake leaped 45 percent compared to the third quarter of 2016 and deliveries jumped 48 percent in the period. Volvo CE posted a strong improvement in profitability as well.
Sales totaled SEK 15.091 billion (about U.S. $1.848 billion) compared to SEK 11.539 billion in the third quarter of 2016. Operating income jumped 237 percent to SEK 2.024 billion, compared to SEK 601 million in the year-ago quarter. Profitability was impacted by higher sales, improved capacity utilization in the industrial system and from the sale of Volvo CE’s dealerships in Great Britain.
The 45-percent net order intake hike was largely driven by higher intake from China, as well as growth in other Asian markets and Russia. Deliveries increased 48 percent to 14,431 machines.
Sales in Europe increased 13 percent in the third quarter, from SEK 4.583 billion in Q3 2016 to SEK 5.179 billion in Q317. In North America, sales increased from SEK 2.476 billion to 3.013 billion, a 21.7 percent leap. Sales to Asia jumped 60 percent year over year from SEK 3.423 billion to SEK 5.483 billion. In South America the leap was 16 percent from SEK 400 billion to SEK 464 billion.
Year to date through August, the European market hiked 15 percent, driven by growth in the U.K., France and Italy. The German market is up slightly, while the recovering Russian market is up 101 percent. North America is up 7 percent because of growth in demand for excavators. The Chinese market has jumped 74 percent, with strong recoveries in excavators and wheel loaders.
“This is an especially strong performance,” said Martin Weissburg, president of Volvo Construction Equipment. “Volvo CE has responded well to the growing demand, with volume increases up 48 percent, while at the same time taking a significant step in profitability. We also continue to gain market share within our product and market strongholds.”