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Rebound for Volvo CE led by China demand

Volvo Construction Equipment has reported a recovery in the third quarter in the wake of the COVID-19 outbreak.

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Rebound for Volvo CE led by China demand

Volvo CE pointed to “improved customer sentiment” as its order intake rose by 40% and deliveries of machines increased 20% in Q3 2020, while adjusted sales were up 6%.

 

The company said that the recovery in demand for its construction equipment and services was particularly strong in China.

 

While net sales in the third quarter decreased by 2% to SEK17,619M (from SEK17,921M), when adjusted for currency movements they were up 6% in the period. Adjusted operating income was also slightly down, at SEK1,963M, compared to SEK2,180M in the corresponding period in 2019. This equated to an operating margin of 11.1% (from 12.2%).

 

Net order intake in the third quarter increased by 40% compared with the same quarter in 2019. Deliveries increased by 20%, to 19,774 machines, in the third quarter, mainly driven by higher sales in China.

 

“Most markets recovered well from the effects of the COVID-19 pandemic in the third quarter, with machine utilisation at the end of the period at almost 2019 levels,” stated Volvo CE. “That said, the ongoing uncertainty created by the pandemic weighed on the European market, which up to the end of August was down by 19%.

“The North American market was also down by 19%, while South America was up 11%, albeit from very low levels in 2019. In Asia [excluding China], the total market was down 13%. The Chinese market recovered strongly from the impact of the pandemic, driven by government stimulus measures, prompting an increase in demand of 22% in the period.

 

Melker Jernberg, president of Volvo CE, commented: “After the sharp COVID-19 triggered downturn of Q2, we saw construction activity gradually improve across most markets in the third quarter.

 

“Demand was particularly strong in China, the world’s biggest market, and here we continued to grow our market share. With continuing uncertainty due to the ongoing spread of the pandemic, we will maintain a tight focus on cost control, and prioritize the health and safety of colleagues, customers and business partners.”

 

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