Volvo Construction Equipment sales dropped 17 percent in the first quarter to SEK 20.1 billion, or about $2 billion, compared to 2019.
The company cited “the rapid deterioration of global demand” caused by Covid-19.
Operating income dropped from SEK 3.65 billion to SEK 2.68 billion ($270 million), a decrease of 26 percent. The company cited lower machine volumes and an “unfavorable machine mix.” Orders decreased 7 percent in the quarter, although demand picked up in China late in the quarter. Deliveries were down by 13 percent to 20,170 machines, compared to 23,139 machines in Q1 2019.
Sales in North America dropped 25 percent from Q1 2019 sales, to $370 million.
“The measures to stop the spread of the Covid-19 pandemic began affecting our operations in China in February, and had a severe impact in mid-March, when our global supply chain was disrupted and production halted in most parts of our operations,” said president Melker Jernberg in a prepared statement. “It is clear that we are now entering a tough period, with both production stops and low demand having a negative impact on our profitability. That said, we take confidence in the fact that our customers are active in businesses that are important to society, and that our products and services are vital in building sustainable infrastructure for the future.”
Source: Volvo CE
