Volvo Construction Equipment recorded another strong performance in the third quarter of 2011, with net sales in the July-September period rising 18 percent to SEK 14,958 million (about U.S. $2.29 billion) compared with SEK 12,710 million for the same period in 2010. Adjusted for currency movements, net sales increased 27 percent during the period. Order bookings were up 30 percent on Sept. 30, compared with the same date in 2010.
Volvo was also more profitable, posting a 6-percent boost in operating income to SEK 1,403 million (about U.S. $214.3 million), compared to SEK 1,330 million in the year-ago quarter. The strong performance was achieved despite having to absorb the negative impact of the weakening U.S. dollar. The weak dollar dented Volvo CE’s operating margin, which dropped from 10.5 percent in the third quarter of 2010 to 9.4 percent this year.
“The markets for our construction equipment continue to expand, even in China where we have strengthened our position as market leader despite a government-induced slowdown that is designed to curtail inflation,” said Pat Olney, president and chief executive of Volvo CE. “The recoveries in Europe and North America are especially pleasing, and market conditions for the remainder of 2011 continue to be favorable.”
Market conditions for the full year 2011 are projected to increase by between 15 and 20 percent down slightly from the company’s previous forecast of 15 to 25 percent. The European market is expected to rise 20 to 25 percent, while North America is expected to increase 35 to 40 percent. South America is predicted to jump 15 to 20 percent and Asia, excluding China 20 to 25 percent. China itself is projected to rise 5 to 10 percent for the full year 2011.
A third-quarter highlight was the announcement of an SEK 350 million investment in a new excavator plant in Kaluga, Russia. Production is due to start in early 2013 and will initially manufacture excavators in the 21-46 tonne classes.
The North American market showed a 26.3-percent hike, posting SEK 1,913 million (about U.S. $293 million), compared with SEK 1,913 million in last year’s third quarter. Europe leapt 19.8 percent from SEK 3,861 million in Q310 to SEK 4,627 million this year (about U.S. $708 million). The South American market improved less than 1 percent in the third quarter from SEK 1,106 million to SEK 1,115 million, while Asia increased 14.3 percent from SEK 5,563 million last year to SEK 6,358 million in this year’s third quarter.
For the first nine months of 2011, the company jumped 23.2 percent from SEK 39,153 million last year to SEK 48,237 million (about U.S. $7.4 billion.)
