Volvo Construction Equipment experienced growth in sales, earnings, deliveries and order intake during the first quarter of 2014. Much of the improvement during the period came from higher sales of smaller machines, while larger machine sales remained relatively subdued. The biggest sales increases came from more mature markets, particularly North America, where sales were up 21 percent during the period, compared to the same three months in 2013.
During the first three months of 2014 Volvo Construction Equipment saw net sales grow by 10 percent to about $2.04 billion (SEK 13.371 million). When adjusted for currency movements, growth increased by 11 percent. Operating income was also up during the period; operating margin strengthened to 4.8 percent, up from 4.1 percent. Deliveries increased by 11 percent compared to the same period a year ago, while the order intake was 9 percent higher than in the same quarter in 2013.
These results come amid a gradual improvement in the market situation. Measured in units, Europe grew by 15 percent during the first two months of 2014, while North America was up by 7 percent despite a harsh winter. South America saw demand fall, caused mainly by Brazil, where most of the large government-funded projects have been delivered, as well as reduced demand for commodities.
The prospects for the rest of the year remain modest. Measured in units, Europe and North America are both expected to grow by 0-10 percent, while South America and Asia (excluding China) are forecast to decline by up to 10 percent. China, meanwhile, is expected to develop in the region of -5 percent to +5 percent during 2014.
“The seasonally strong first quarter had a positive impact on volumes, which contributed to improved profitability compared with the weak close of 2013,” commented Volvo CE’s President Martin Weissburg. “The situation continues to be challenging, particularly for customers and dealers with large exposures to the mining industry. That said, we expect a moderate growth in Volvo CE’s mature markets.”