Volvo Penta reports profit despite sales decline
GOTEBURG, Sweden – Marine engine manufacturer Volvo Penta reported a 32-percent decline in total sales during the third quarter, once they were adjusted for changes in current exchange rates, Volvo reported in its recent earnings report. Total sales amounted to SEK 1,925 M, compared with SEK 2,686 M in the year-earlier period.
Sales were distributed between the two business segments as follows: Marine SEK 1,162 M (1,642) and Industrial SEK 762 M (1,046).
Volvo Penta’s operating income was SEK 25 M (198). While it was negatively affected by lower sales volumes and under absorption of costs in the production system, reduced cost contributed to the operating profit, according to the company. The operating margin amounted to 1.3 percent.
“The global demand for marine engines continued to be very weak,” the company stated. “Many boat builders in Europe have used shorter working weeks and in some cases been closed for extended periods as a consequence of the low demand and the situation is similar in North America.”
While Volvo noted that demand for industrial engines is somewhat stronger than for marine engines, it said that demand is on considerably lower levels than in previous years.
With the marine market, diesel engines with sterndrives is Volvo Penta’s strongest segment, according to the company, and thanks to the new generation diesel engines D4 and D6, Volvo Penta has maintained and strengthened its position in this segment, the company added.
Volvo Penta also noted that a large number of leisure boats with new and larger versions of the IPS system have been launched this autumn, which gradually strengthens Volvo Penta’s market share in the inboard segment, according to the company.
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