Volvo CE sees record quarter despite mixed markets

Volvo Construction Equipment's sales for the first quarter were up +17% to a record SEK 18 billion (US$ 2.67 billion). Operating profits were up +21% to SEK 2.13 billion (US$ 316 million) to give the company an operating margin of 11.8%. Volvo said its profits and margin were the best it had ever achieved in a first quarter.

According to Volvo, this result was achieved against a mixed market backdrop. It said that between December and February, the market in unit terms in Europe was up +16%, while North America grew +35% and Asia (excluding China) rose +24%. However, the South American market was flat, with only +3% growth and demand in China was -26% lower than the same period last year.

Volvo said that despite difficult market conditions, its sales in China were unchanged compared to a year ago. This saw its market share, which includes machines sold by its subsidiary Lingong under the SDLG brand, grew to 13.7% on a rolling 12-month basis. The company's forecast for the year is that Chinese equipment demand will fall by between -15% and -25%.

Forecasts for the rest of the world are more up-beat. Sales in Europe are expected to grow by between +10% and +20%, North America will see +15% to +25% growth and both Asia (excluding China) and South America could be up by as much as 10%, although the lower end of the forecast is for zero growth.