Kobelco’s sales of construction equipment came to JPY 98.1 billion (US$ 955 million) for the first quarter of the fiscal year which started on April 1, a +14% rise on the same period last year. The company’s Cranes and Construction Machinery divisions returned a combined pre-tax profit of JPY 9.2 billion (US$ 90 million), a +155% improvement on the first quarter of 2013.
The company said excavator sales were up in Japan with a last-minute buying surge ahead of a new tier of exhaust emissions regulations and a rise in consumption tax. It said that demand was sluggish elsewhere in Southeast Asia, but was alone among other manufacturers reporting results this quarter in saying excavator sales were up in China compared to a year ago. Kobelco said it was also seeing growth in Europe and North America having re-entered these markets following the end of its ten-year joint venture with CNH in 2012.
The company also saw robust growth in its crawler crane sales, with domestic demand in Japan surging on the back of higher public investment, among other factors. It also said markets elsewhere in Asia were strong as were sales in other parts of the world.
These factors contributed to a +155% overall rise in pre-tax profit for these two divisions, to JPY 9.2 billion (US$ 90 million). This gave them an pre-tax margin of 9.4%, compared to just 4.2% for the same period last year, when they made JPY 3.6 billion (US$ 35 million) in pre-tax profits on revenues of JPY 86.1 billion (US$ 35 million).
Despite the growth in sales and profits, Kobelco has revised its full-year sales forecast downwards. It now expects the two divisions to have revenues of JPY 406 billion (US$ 3.95 billion) for the fiscal year, compared to the previous forecast of JPY 413 billion (US$ 4.02 billion). However, this would still represent a +8.3% increase on fiscal 2013’s full-year revenues of JPY 375 billion (US$ 3.65 billion).
The company did not elaborate on the reasons for this downward revision.