Hitachi Construction Machinery has slashed its operating profit forecast for the year to March by 44%.
In a statement to the Tokyo Stock Exchange, the company also cut its sales forecast by 3.7% to JPY 780 billion (US$ 6.49 billion).
In the first half of the year, which ended in September, net income had reportedly fallen by 48%, while revenues were down by -6%.
The figures, from one of the world’s largest construction machinery manufacturers, follows the slump in China, which is now affecting much of the developed world.
In a statement on Tuesday, Hitachi’s chief financial officer, Tetsuo Katsurayama, was pessimistic about the short-term prospects for demand from China, saying, “We have a view that we won’t see a recovery in the second half.”
Speaking in Tokyo, he said, “Sales are expected to fall short of the company’s previous forecast due to demand slowdown in developed countries and further slowdown in emerging markets.”
In an effort to contend with the slowdown in China, Hitachi had previously restructured its expenses, but Katsurayama admitted the decision had compounded the impact of the decline in sales.
One of the world’s leading suppliers of large excavators and mining dump trucks, Hitachi now reports that the drop-off in demand for excavators has now hit all markets bar India.