Volvo Construction Equipment reports in its latest earnings announcement that the company saw sales decline in the third quarter despite seeing an improvement in the European market and an increase in order intake across all regions.
The heavy equipment manufacturer saw sales fall 3 percent to to SEK 11.539 billion ($1.3 billion U.S.). When adjusted for currency movements, sales were down by 2 percent, the company notes. Adjusted profit increased 4 percent to SEK 601 M ($67.3 million).
Volvo says it saw net order intake increase by 17 percent over 3Q 2015. The company buffered enthusiasm for that increase by noting that it follows “low levels” in 2015. However, Volvo is encouraged by the fact that order intake increased across all regions.
Order intake from the European market was bolstered by demand from France and Germany, but counterbalanced by lower demand from Norway and Russia. Volvo CE says North American orders increased thanks to the launch of compact equipment with Tier 4 Final engines.
The company also saw a 24-percent jump in orders from Asia driven by higher demand for Volvo excavators in China and “continued strong growth” in India. Volvo credits increased demand in South America to growth of the SDLG brand in Brazil, noting that SDLG-branded machines are also growing in popularity in China and Southeast Asia.
“Despite continued low demand operating margin improved slightly in the third quarter to 5.2 percent,” says Martin Weissburg, president of Volvo CE. “We see no immediate increase of demand and continue the internal work to focus on Volvo CE’s strongholds.”