Kobelco construction machinery sales drop

Japanese manufacturer Kobelco saw sales of construction machinery and cranes drop to JPY 172.4 billion (US$ 2.2 billion) for the first half of the fiscal year, down from JPY 203 billion (US$ 2.5 billion) for the same six months a year ago.

Sales of excavators in its construction equipment division decreased -16.5% year-on-year in the six months to 30 September to JPY 150.3 billion (US$ 1.9 billion), while ordinary income declined JPY 12.9 billion (US$ 162 million) in comparison to the same period last year to JPY 5.6 billion (US$ 70 million).

The manufacturer said domestic demand in its construction machinery division had increased on the back of reconstruction work following the earthquake last year, while demand was strong in Southeast Asia. However, it said sales in China – a major market for the company – decreased considerably in comparison to the same period last year, and offset any growth elsewhere.

In the cranes division, Kobelco said sales also fell in the first half, but only thanks to, “Changes in the types of cranes sold.” It said it had seen higher domestic demand from reconstruction work, together with a recovery in overseas demand, primarily in North America and Southeast Asia.

Nevertheless, cranes sales were down -3.6% year-on-year to JPY 22.1 billion (US$ 278 million), while the division reported a loss of JPY 0.8 billion (US$ 10 million).

Looking ahead, Kobelco said demand for its cranes and construction machinery was expected to remain strong in Japan as demand for reconstruction work continues. It added that excavator sales in China were expected to recover from the start of fiscal 2013, while international cranes sales were expected to continue on a recovery trend.

But despite this, the company forecast combined excavator and cranes sales of JPY 332 billion (US$ 4.2 billion) for the full year to 1 April, 2013, compared to its fiscal 2011 result of JPY 355 billion (US$ 4.5 billion). Similarly, full-year combined cranes and construction machinery ordinary income is forecast to fall to JPY 3 billion (US$ 38 million), compared to JPY 22.9 billion (US$ 288 million) for fiscal 2011.