Buoyed by improvements in most of its major market segments, Volvo Construction Equipment (Volvo CE) reported that net sales in the second quarter of 2017 increased by more than a third compared to the same period of 2016. Good cost control as volumes return also resulted in a significant improvement in profitability, the company said.
“Demand for construction equipment continues to improve in Europe and China, and also a clear recovery in the mining segment in many parts of the world,” said Martin Weissburg, president of Volvo Construction Equipment. “Thanks to Volvo CE keeping tight control over costs as volumes return, these increased sales have resulted in a significant improvement in profitability.”
Net sales in the second quarter increased by 36%, amounting to SEK 18,511 million (US$2.2 billion) vs. SEK 13,630 million (US$1.6 billion) in the second quarter of last year. Operating income was also strongly up, at SEK 2460 million (US$296 million) in the period, more than three times the SEK 810 million (US$97.5 million) reported in the same period the year before, equating to an operating margin of 13.3% (5.9%).
The second quarter 2017 also saw order intake increase by 54%, while deliveries in the period were up 49%, at 17,472 machines. Order intake in China was particularly strong, rising by 221%, driven by increased demand for SDLG wheel loaders and SDLG and Volvo excavators.
Volvo said the second quarter of 2017 saw increased demand in most major markets. Europe was up 14%, while North and South America both saw a 4% improvement. Asia (excluding China) was up 8%, while the Chinese market was up almost two thirds, at 65%.