Hitachi lowers full-year forecasts

Despite reporting an increase in net sales and operating income for the nine months to 31 December, 2011, Japanese manufacturer Hitachi Construction Machinery has lowered its full-year sales forecast on the back of a "significant decrease" in demand for hydraulic excavators in China.

For the nine months ended 31 December, 2011, net sales were up +4.4% year-on-year at JPY 553 billion (US$ 7.1 billion), while net operating income jumped +43% to JPY 29.6 billion (US$ 382 million).

The overall increase was fuelled by a +18% year-on-year rise in sales in Japan, a +44% surge in the Americas, and a +15% rise in sales in the Asia and Oceania region (excluding China).

Slump in China

However, this masked a slump in China, where sales dropped -30% year-on-year for the nine-month period to JPY 92 billion (US$ 1.2 billion). Sales in Europe fell by 0.9% year-on-year, while the Russia-CIS, Africa and Middle East division saw sales increase by a marginal +0.2%.

"In China, due to the government's continued tight financial policy resulting in delays in the start of new construction work, the demand for hydraulic excavators decreased considerably from the previous year," the company said, adding that it expected overall demand for hydraulic excavators in the fiscal year 2011 to decrease by 5000 units to 224000 units

Hitachi now expects to report full year 2011 net sales of JPY 810 billion (US$ 10.4 billion), down -4.7% compared to its previous forecast, issued in October last year. However, the revised figure would still represent an increase on the company's 2010 full-year sales, which stood at JPY 774 billion (US$ 9.47 billion).

Hitachi said it also expected 2011 operating income to decrease year-on-year, and forecast a result of JPY 60 billion (US$ 774 million), down from its previous forecast of JPY 65 billion (US$ 838 million). Again, however, this would still represent a big jump compared to its full-year operating income of JPY 41.5 billion (US$ 508 million) for the fiscal year 2010.