With solid demand for its products continuing in most markets, Volvo Construction Equipment saw a 24-percent surge in sales and strong profitability during the third quarter of 2018, compared to the same period a year earlier.
Strong growth in South America, China and Russia helped drive the sales growth, continuing a strong year for the company. Second-quarter sales had jumped 32 percent over the same time period in 2017, for example.
“It is encouraging that we have been able to sustain the strong development of recent quarters, with both sales and profitability being above the levels of last year,” says Melker Jernberg, president of Volvo C.E. “Good demand in most markets for our range of competitive products helped to deliver yet another strong set of figures.”
Net sales in the third quarter increased by 24 percent to SEK 18.6 billion. Operating income was also up, rising to SEK 2.6 billion ($287 million), up from SEK 2 billion in the corresponding period in 2017, Volvo says.
“This again delivered a yet stronger operating margin of 13.9 percent (13.4 percent),” a press release says. “Profitability was positively impacted by higher equipment and service sales, improved capacity utilization in the industrial system and good cost control.”
China, Europe orders way up for compact machines
Net order intake in the third quarter increased by 22 percent compared with the same quarter in 2017. This increase was largely driven by higher intake from China and particularly Europe, where orders taken jump by 53 percent, thanks in part to large rental orders for compact machines, the press release says.
North American orders also grew strongly, rising 47 percent, propelled by medium and large machine sales, and South America also saw order intake rise by a fifth.
Deliveries increased by 17 percent to 16,861 machines in the third quarter.
Market keeps on developing
North America had an increase of 19 percent over last year, with sales especially brisk for excavators, haulers, large wheel loaders and road equipment.
The South American market was up by a quarter from the low levels of last year, buoyed by a stronger market in Brazil.
In Asia (excluding China) the total market was 13 percent above last year. The Chinese market was 42 percent above last year, albeit with a slowing trend as the year unfolds.
Until the end of August, the European market was up by 11 percent, stoked by growth in Russia and stable demand in Germany, the UK, France and Italy.
Last year, Volvo C.E. posted a 31-percent sales hike for all of 2017.