Komatsu’s equipment business flat

Net sales for Komatsu’s construction, mining and utility equipment business came in almost unchanged in the fiscal year to the end of March 2015, at JPY 1,763 billion (US$ 14.8 billion). However, the division’s operating income was down -6.1% to JPY 227 million (US$ 1.91 billion).

Overall, the company saw net sales rise +1.3% for the fiscal year to JPY 1,978 billion (US$ 16.6 billion), with operating income up +0.7% to JPY 242 billion (US$ 2.03 billion). Komatsu said the increase in profit was due to better selling prices and the depreciation of the Japanese Yen.

Komatsu said that sales declined last year in Japan, where it saw falling demand from rental companies. Elsewhere in Asia, it said sales “declined drastically” in China as the government moved away from a policy of rapid economic expansion. Komatsu also said demand remained sluggish in other Asian markets such as Indonesia and Thailand, but noted rises in the Philippines and India, among others.

The company also said that sales declined in Latin America last year, which was linked to the weakness in the global mining sector. Komatsu also singled-out the CIS as a difficult market last year, with the Russian economy being hit by currency depreciation as well as the weakness in commodity prices.

However, residential construction and rising infrastructure investment saw the company increase sales in North America in the last fiscal year. Komatsu also said revenues were up in Europe, and singled-out the UK as a particular bright spot.

Sales also increased in the Middle East last year, thanks to strong markets in the gulf region including Saudi Arabia, Qatar and the UAE. Meanwhile, Africa was also up thanks to the South African market.

Outlook

Komatsu said it expected its net sales to fall a further -5.0% in the forthcoming fiscal year, to JPY 1,880 billion (US$ 15.8 billion). Operating income is expected to be down -8.7% to JPY 221 billion (US$ 1.85 billion).