Komatsu’s profits jump as demand returns

Komatsu reported first quarter sales to 30 June of JPY 447 billion (US$ 5 billion), up +39.5% on the JPY 320 billion (US$ 3.6 billion) recorded for the equivalent quarter last year. Pre-tax profits for the quarter jumped +474% to JPY 50 billion (US$ 569.6 million), up from JPY 8.7 billion (US$ 99 million) 12 months ago.

A statement said that during the first quarter demand for construction and mining equipment increased in all regions of the world when compared to the same period last year. Demand for the company's industrial machinery also began to show signs of recovery.

Against the improved backdrop, sales of construction, mining and utility equipment increased by +42.3% to JPY 405 billion (US$ 4.6 billion). Komatsu's most dynamic market was China with sales for the quarter of JPY 98.5 billion (US$ 1.1 billion), up +77.5% on the JPY 55.5 billion (US$ 631 million) reported last year.

A spokesperson said, "Demand in China expanded sharply as urbanisation advanced and large-scale infrastructure development projects, such as railways and highways, continued under the leadership of the Chinese government.

"Anticipating further market expansion, Komatsu has worked to reinforce production, sales and service operations in China," said the spokesperson.

The Americas also reported a strong performance with sales of JPY 98.2 billion (US$ 1.1 billion), up +34.9% on the JPY 72.8 billion (US$ 828 million) recorded 12 months ago. The Asia and Oceania region, excluding Japan and China, also reported an impressive growth in sales to JPY 92.9 billion (US$ 1 billion), up +70.9% on the JPY 54 billion (US$ 619 million) recorded last year.

The spokesperson said, "In North America, while the economy fell short of recovery, particularly as US housing starts remained sluggish, the operating rate of construction equipment began to increase gradually. Demand stopped falling after three and a half years and turned to growth.

"In Latin America, and particularly Brazil demand continued to expand in mining, civil engineering, agriculture and other sectors, while in Chile, demand for mining equipment remained strong."

The spokesperson said that as demand recovered Komatsu worked to increase prices in the Americas while strengthening sales and product support operations.

"In Indonesia, the largest market in Southeast Asia, demand expanded substantially in the civil engineering, agriculture and forestry sectors," said the spokesperson. "Demand also increased in India, Thailand and Malaysia, while sales in the mining sector prompted growth in Australia."

Other markets reporting positive growth in the quarter included Japan, which saw sales climb +5.2% to JPY 54.4 billion (US$ 619 million), up from JPY 51.7 billion (US$ 589 million) 12 months ago. Europe, Russia and the Commonwealth of Independent States (CIS) reported a +23.4% increase in sales to JPY 39.6 billion (US$ 451 million), up from JPY 32 billion (US$ 365 million). The improvement was attributed by the spokesperson to a stabilisation of the construction markets in Germany, the UK and France.

The Middle East and Africa also reported a +18.2% growth in sales for the first quarter to JPY 21.4 billion (US$ 245 million), up from JPY 18 billion (US$ 207 million) 12 months ago.