Komatsu sees Chinese sales cut in half

Komatsu's sales of construction and mining equipment in the first quarter of the fiscal year totalled JPY 429 billion (US$ 5.50 billion), a -1.5% fall on the same period last year. The company said a steep fall in the Chinese market and adverse currency effects were the main causes of the decline.

In China, the company's sales for April to June were down -46% on the same period last year at JPY 40.8 billion (US$ 521 million). "Although the government introduced credit easing measures, there were still no clear signs for new project starts," Komatsu said in a statement. It added that it is pushing its hybrid excavators in China, which now account for about 20% of the 20 tonne class machines it sells in the country.

In Europe and the CIS revenues were down -6.9% on last year to JPY 49.8 billion (US$ 637 million). Komatsu said that despite steady increases in demand in France, Germany and the UK, as well as a more pronounced improvement in the CIS, the appreciation of the Japanese Yen saw sales fall in its home currency terms.

Komatsu also saw a -6.6% decline in African and Middle Eastern sales in the first quarter, with revenues hitting JPY 27.6 billion (US$ 354 million).

On the positive side, the company saw an +18% rise in revenues from the Americas, for a total of JPY 125 billion (US$ 1.60 billion). "In North America, where recovery of demand in the housing sector has picked up momentum, demand for equipment has remained strong in the rental, energy development and mining industries," it said.

Sales were also up +1.8% in Japan to JPY 62.6 billion (US$ 800 million), which the company attributed to reconstruction work following last year's earthquake and tsunami.

Meanwhile, other markets in Asia and Oceania were up +12.6% to JPY 123 billion (US$ 1.57 billion). Komatsu cited strong demand in Australia and rebuilding work in Thailand following last year's floods as key factors, although it said Indonesia, the region's largest market, was down due to a slowdown in mining caused by a fall in the price of coal.

As a group, Komatsu's revenues for the first quarter were down -4.9% to JPY 470 billion (US$ 6.01 billion), compared to a year ago, while net profits fell -42.3% to JPY 32.1 billion (US$ 411 million).

Forecasts lowered

Komatsu said the prospect of a delayed recovery in china, weakening demand in Indonesia and adverse currency effects had prompted it to revise its revenue and profit forecasts for the full fiscal year, ending on March 31, 2013.

The company now expects revenues to come in at JPY 1970 billion (US$ 25.2 billion) - about level with last year, but some -6.2% lower than its previous prediction of JPY 2100 billion (US$ 26.9 billion) for 2013. Net profits are expected to be JPY 157 billion (US$ 2.01 billion) - down -6% on last year's figure of JPY 167 billion (US$ 2.14 billion) and some 17.4% lower than the previous forecast of JPY 190 billion (US$ 2.43 billion).