October, 26 2009 – The continued weakness in the world
market for construction equipment was reflected in Volvo Construction
Equipment’s third quarter 2009 financial results. Net sales declined by 38% to
SEK 8,176 M from 13,213 during the period. However, the operating loss of SEK
787 M was considerably below the SEK 1,259 M experienced in the second quarter
of 2009. This improvement is the result of efficiency measures being
implemented at the company, inventory reductions, and the adjustment of costs
to current demand.
Asia leads recovery
Measured in units, the total world market for heavy, compact, and road
machinery equipment decreased by 42% in the third quarter of 2009, compared to
the same period last year. In Europe, the market was down by 54%, North
American market decreased by 50%, and Asia
declined by 11%. Other International markets decreased by 61%. The rapid flow
of stimulus funding into its construction industry meant that China was one of the few bright spots in the
industry during the period, increasing by 45% compared to last year, and
helping bolster the situation in Asia. In
fact, Asia accounted for over a third of Volvo Construction Equipment’s net
sales during Q3 – putting it on a par with Europe.
“Tough
market conditions continue in the sector, but there are some positive signs
indicating that the decline in demand may have bottomed out and that we are now
beginning a gradual recovery,” says Olof Persson, President & CEO of Volvo
Construction Equipment. “But we are not relying on a substantial recovery and
will therefore continue to improve efficiency and adjust our costs to current
demand. I am confident of improving our market position globally, as we are
well positioned for the new emission regulations that will soon come into
force, with new products and services at the absolute forefront.”
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