Weak markets hit Hitachi figures

Hitachi Construction Machinery’s revenues for the first quarter of the fiscal year were down-5.5% on the same period last year to JPY 177 billion (US$ 1.43 billion). Its operating profit dived -62.6% to JPY 4.95 billion (US$ 40 million).

Particular highlights for the company were its North American sales, which were up +24.5% to JPY 27.6 billion (US$ 223 million), its business in India, which was up +19% to JPY 9.19 billion (US$ 74 million), sales in the Middle East, which were up +43.7% to JPY 6.9 billion (US$ 55.8 million) and its domestic sales in Japan, which rose +6.5% to JPY 43.7 billion (US$ 353 million).

On the downside, revenues from Russia and the CIS were some -60.7% lower than the same quarter last year at JPY 3.96 billion (US$ 32 million). Oceania also saw a steep decline, with revenues from this region falling -21.1% to JPY 19.3 billion (US$ 156 million), while China was down -43.2% to JPY 14.8 billion (US$ 120 million).

In terms of the impact on Hitachi’s results, the decline in China was the most significant in absolute terms at JPY 11.3 billion (US$ 91 million).

Commenting on the state of the construction equipment market, a company statement said, “Demand in North America remained at the same level year-on-year due to a downturn in energy-related demand, despite a recovery in housing starts. In Europe, while the situation differs in each country, the overall demand slightly decreased year-on-year. In China, demand fell significantly due to deceleration of real estate investment, particularly a decrease in public construction in rural areas. Demand in Southeast Asia was sluggish, mainly around Indonesia and Malaysia.”

Despite the difficulties in the first fiscal quarter, Hitachi said it expects revenues for the year to be almost unchanged from last year at JPY 810 billion (US$ 6.55 million). However, it is forecasting a -14.5% decline in operating profit to JPY 54 billion (US$ 437 million).