Crane division lifts Kobelco equipment business

Kobelco’s sales of construction equipment came to JPY 382 billion (US$ 3.2 billion) in the fiscal year ended March 31, a +1.9% increase on the previous fiscal year. Ordinary income jumped +43% to JPY 26.1 billion (US$ 219 million).

Kobelco operates in the industry through two divisions. Kobelco Construction Machinery manufactures and sells excavators, while Kobelco Cranes focuses on crawler cranes.

Sales for Kobelco Construction Machinery fell -2.3% last year to JPY 311 billion (US$ 2.61 billion), as markets declined in Japan, China and Southeast Asia. However, this was offset somewhat by increasing sales in North America and Europe. The division’s operating income was up +40% to JPY 21 billion (US$ 176 million), “owing to changes in sales regions and the sales mix of machines,” according to Kobelco.

Kobelco Cranes meanwhile enjoyed a strong year, with sales up +25.6% to JPY 71.1 billion (US$ 596 million), and ordinary income up nearly +60% to JPY 5.1 billion (US$ 43 million).

The company said crane sales were up in its domestic market thanks to increased public spending, and that demand was strong in export markets too, including North America and the rest of Asia.

The company’s outlook for the coming year is mixed. As far as Kobelco Construction Machinery is concerned, the domestic market is expected to remain firm, but overseas markets will continued to be mixed. “Kobelco will strive to expand sales in Europe and North America, but anticipates that demand in China will continue to be sluggish,” said a company statement.

Unit sales of excavators are expected to fall this year as a result, but revenues should be level.

Things look more upbeat for Kobelco Cranes, with the global good news expected to continue. “Domestic demand is anticipated to remain firm on the back of a high level of public investment. Overseas demand is also expected to be firm mainly in North America and Asia. Owing to these factors, unit sales in fiscal year 2015 are expected to be higher than fiscal year 2013, and as a result, segment sales are also expected to be higher,” said the company.