China deflates Komatsu's full year results

Komatsu's sales of construction and mining equipment for the fiscal year ending March 31 were up +7.7% to JPY 1739 billion (US$ 21.1 billion). Operating profit for the segment was up +11.5% to JPY 246 billion (US$ 3.0 billion).

The company says it saw sales rise in all regions of the world apart from China last year. The steepest increase was in Asia, excluding China and Japan, where sales were up +28.5% to JPY 481 billion (US$ 5.87 billion), which also made it Komatsu's largest region. It was followed in terms of size by the America's where sales were up +14.6% to JPY 443 billion (US$ 5.40 billion).

In Europe and the CIS, growth was a more robust +22.2%, with sales hitting JPY 200 billion (US$ 2.44 billion), while there was a similar increase in Africa and the Middle East, taking revenues to JPY 127 billion (US$ 1.55 billion).

Komatsu's domestic sales were up +13.8% to JPY 286 billion (US$ 3.49 billion). The company said this was due to a decline in the availability of used machines, where were increasing sold for export last year, along with renewed demand for equipment, particularly from rental companies, for reconstruction following the March 2011 earthquake and Tsunami.

Chinese decline

However, the hitherto booming Chinese market cooled last year, with Komatsu's revenues falling nearly -40% to JPY 201 billion (US$ 2.46 billion). The fall in sales was equivalent to JPY 133 billion (US$ 1.62 billion) "As the government's credit squeeze measures remained in place, the start of new construction projects was delayed by lack of funds and demand dropped sharply, especially in the civil engineering industry," the company said in a statement.