New highs at Tadano
By Euan Youdale21 May 2008
Tadano's fortunes continued to rise at home and abroad in the 2007 to 2008 financial year, despite a slump in its loader crane division.
Bolstered by replacement demand for construction cranes, domestic sales rose 10.7% to JPYen92.8 billion (US$ 893.3 million) in the year ending 31 March 2008. Overseas sales increased 33.9% to JPY81.6 billion ($787 million). This followed a sharp increase in sales of construction cranes in the European and North American markets, said the company. As a result, total sales grew 20.5% to JPY174.4 billion ($1.7 billion) and the ratio of overseas reached a record 46.8%.
Ordinary income rose 32.7% to JPY18 billion ($173.5 million), due to increased sales. Net income jumped 51.1% to JPY11.6 billion ($112 million), "as we posted an extraordinary income of JPY591 million ($5.7 million) on the reversal of allowance for bad debts," explained Tadano.
In the domestic market, the company increased sales of its mainstay 25 tonne and 60 tonne rough terrain cranes thanks to demand for replacement machines. As a result, sales increased 24.7% to JPY42.4 billion ($408.5 million) compared with the previous fiscal year.
In overseas markets, sales increased considerably by 41.8% to JPY62.7 billion ($604.4), over the previous year. "Demand increased in North America, continued to grow in Europe and remained high in the Middle East, on the back of active construction and capital investments," said Tadano. This led to sales of construction cranes surging 34.4% to JPY105 billion ($1 billion) compared to the 2006 to 2007 period.
However, the company's loader cranes enjoyed a less successful year. "With the end of the replacement demand cycle for trucks that meet new diesel emission regulations, we sought to expand sales of cargo cranes by launching new models with improved mileage and quality." This resulted in sales of truck loader cranes falling 11.5 % to JPY15.3 billion ($147 million).
In its forecast for the year ahead, Tadano said worldwide markets faced an uncertain future. "While the Japanese economy is expected to avoid a slowdown due to the rebound effect from delayed construction starts and increased exports to newly emerging countries, numerous risk factors remain."
"They include further increases in the prices of crude oil and primary materials, a rise in the value of the Yen and declining stock prices. Overseas, the US economy is most likely set to enter a recessionary period, while the European economy is also expected to decelerate."