Volvo Construction Equipment reported strong growth with improving market conditions, increases in sales, profitability, order intake and deliveries in the first quarter of 2017. Volvo’s net sales jumped 30 percent to SEK 16,163 million (about U.S. $1,824 million), compared to SEK 12,452 million in the first quarter of 2016.
Operating income rose significantly to SEK 1,617 million compared to SEK 341 million in the first quarter of 2016. Operating margin was 10 percent, compared to 2.7 percent in Q116.
In the first quarter of 2017, Volvo CE posted an increase in order intake, which soared 34 percent to 17,487 machines, with increases in orders coming from all markets, particularly China and Europe. Deliveries leaped 34 percent to 16,369 units.
The European market increased 26 percent year over year from SEK 4,567 million in the first quarter of 2016 to SEK 5,751 in the just-concluded period. North America leapt 12 percent year over year to SEK 2,924 million. South America, which decreased on a sequential basis from the fourth quarter of 2016, hiked 64 percent compared to Q116 to SEK 404 million. Sales to Asia went up 37 percent year over year, and sales to other markets went up 68 percent.
The total market in Asia rose 10 percent excluding China, boosted by improvements in India and Korea, and strong growth in Indonesia. Demand declined in Turkey and the Middle East.
Business was strong in China (up 48 percent), driven by a 99-percent surge in demand for excavators.
“After years of tough market conditions, the Volvo CE business is growing again,” said Volvo CE president Martin Weissburg. “Higher sales volumes linked with increased internal efficiency and a lower cost base helped us deliver good profitability levels during the quarter. Volvo CE is on the right track, the improvement plan is yielding results and there are further opportunities to improve the long-term competitiveness of the company.”
