Mining and Asian markets drag on Hitachi

Hitachi Construction Machinery’s net sales for the fiscal year ended March 31 were up +1.6% to JPY 816 billion (US$ 6.84 billion) compared to last year. However, the company’s operating income fell -21.4% to JPY 54.3 billion (US$ 456 million) as key markets in Asia declined and demand slackened in the mining industry.

Hitachi’s revenues in the Japanese domestic market fell -4.4% last year, while China was down -36.3% and other key markets in Southeast Asia, including Indonesia, Thailand and Malaysia also disappointed.

This saw the company’s revenues for China, Japan and Southeast Asia combined fall -8.1% last year to JPY 518 billion (US$ 4.34 billion). This mean those markets represented 63.5% of its sales last year, compared to 70% in fiscal 2014.

Hitachi also saw a -28.2% fall in revenues in Russia and the CIS last year, but with net sales of just JPY 28.9 billion (US$ 243 million), this did not have a significant impact on the company’s overall performance. Similarly, the -25.2% decline in Latin American equipment sales translated to revenues of just JPY 6.47 billion (US$ 54 million).

The company added that weak global demand for mining equipment had had an impact in the Americas, Indonesia, Australia and Russia.

On the positive side, Hitachi’s net sales in North America were up +47.8% to JPY 106 billion (US$ 890 million), while Europe was up +30.5% to JPY 93.4 billion (US$ 785 million).

Hitachi forecasts a further -0.7% fall in net sales for the current fiscal year to JPY 810 billion (US$ 6.80 billion), and operating income is expected to be down by a similar proportion to JPY 54 billion (US$ 454 million).