Chinese recession hits Komatsu full-year

Komatsu’s revenues from construction and mining equipment sales in the last fiscal year (ending March 31) were JPY 1680 billion (US$ 17.9 billion), a -3.7% decrease on the previous year. Operating profits were down -15.2% to JPY 209 billion (US$ 2.22 billion).

“While demand increased in North America and Japan from the previous fiscal year, Chinese demand for hydraulic excavators dropped considerably. As a result, global demand remained sluggish, On the mining equipment market, while demand for equipment declined, centring on Indonesia, as adversely affect by the falling price of coal, demand increased steadily for equipment especially in Latin America and Oceania,” said Komatsu in a statement.

Indeed, the biggest sales increase on a regional basis for Komatsu last year was in Latin America, where revenues were up +26.3% to JPY 259 billion (US$ 2.76 billion). North America also performed well, with a +16.3% increase to sales of JPY 276 billion (US$ 2.94 billion), while Japan was up +2.2% to JPY 293 billion (US$ 3.11 billion). There were also improvements for the company in the CIS, Oceania and Africa.

However, Komatsu’s sales in China were down -40.4% to JPY 120 billion (US$ 1.28 billion), and sales in Asia excluding China fell -31.8% to JPY 218 billion (US$ 2.32 billion). Revenues from Europe were down -16.8% to JPY 100 billion (US$ 1.07 billion) and there was also a fall in Middle Eastern sales.

But the company was up-beat about the year ahead, say8ing it believed the Chinese market has bottomed out, while demand should continue to improve in Japan and North America.