Global slowdown hits Hitachi’s Q3 results

Hitachi Construction Machinery (HCM) Group has released its third quarter financial results (ending December 31, 2015).

The company states revenue decreased by 5.3% year-on-year, to JPY 549.1 billion (US$ 4.6 billion), with operating profit down by 72.4% year-on-year, to JPY 12.27 billion ($ 103.3 million).

Citing a continuously deteriorating business environment, Hitachi anticipates a 19% drop in year-on-year demand for its hydraulic excavators and a 10% decline in demand for mining machinery.

The company expects its full-year (April 1, 2015 to March 31, 2016) revenue to fall below its previous forecast, due to the decline of construction and mining machinery revenue.

The forecast for operating profit is not expected to change, however, due to the positive impact of a reduction in overhead costs.

The HCM report describes a small improvement in the Japanese economy – with increasing employment opportunities and higher income – and cites increasing sales of wheeled loaders and mini excavators year-on-year, with last-minute demand increasing ahead of new emission regulations.

report, the depressed global marketplace is also described, with the protracted depression of the construction markets of Russia and China specifically highlighted.

In a strategy intended to increase market share in the medium to long term, HCM has enhanced its parts and service business with a service menu called ‘ConSite’, which offers machine support to customers. The company has also been expanding its parts supply network on a global basis.

HCM has also established a global management support scheme and implemented cost reduction measures in an effort to secure revenue, profit and business efficiency.