Komatsu hits record highs

By Steve Skinner29 July 2008

Komatsu posted first quarter sales of JPY 607 billion (US$ 5.7 billion), a +12.2% increase on the same period in 2007. In line with improved sales, operating profit also increased by +4.5% on 2007 first quarter figures as the company benefited particularly from sales in emerging economies such as China, Indonesia and the Middle East. In the construction, mining and utility equipment sector, Komatsu reported a +6.4% increase in sales against the 2007 first quarter to JPY 534 billion (US$ 5.0 billion). The Japanese fiscal year begins on 1 April, so Komastu's first quarter results cover April, May and June.

Recording particular success in expanding markets and global infrastructure development, especially in emerging economies, the company was able to offset negative factors such as sluggish demand in Japan, where the company saw a -4.1% decrease in first quarter sales. North America also saw a decline in sales as first quarter figures took a -2.8% fall. Meanwhile, expanding demand in the CIS went some way to offsetting a downturn in Western Europe as sales figures for the region decreased by just -1.9%.

While the company suffered from the downturn in Europe, Japan and the Americas, first quarter figures for China, the Asia and Oceanic region and the Middle East and Africa region all showed marked improvement on the same period in 2007 with sales increases of +36.7%, +20.1% and +17.9% respectively. Strong urban renewal and mining projects in China, civil engineering, agricultural and forestry projects in Indonesia and infrastructure and resource developments in the Middle East assisted the company in achieving what were record first quarter sales.

First quarter product sector figures “reflect the company’s continued efforts on sales centering on fuel efficient, high performing ‘Dantotsu’ models (a designation given by Komatsu to machines considered superior to rival products.), as well as through price increases.” Forklift sales almost mirrored the 2007 first quarter whilst compact construction equipment sales declined due to the reduced demand in Japan, North America and Western Europe.

To improve profitability in the utility equipment sector, Komatsu is to restructure its manufacturing operation in Japan and relocate head office functions by February 2009.

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