Komatsu report almost unchanged profit in Q3 2015-16
Komatsu, the world’s second-biggest maker of construction and mining equipment, said its profit was almost unchanged in the three months to 31 December 2015.
Slowing economic growth in China and the collapse of commodity prices extended the Japanese giant’s slide in sales to mining companies and builders.
Net income was US$320 million (38.6 billion yen) for Q3 fiscal 2016, compared with 38.5 billion yen a year earlier, the Tokyo-based company said in a regulatory statement. Sales fell 3.2% to 478 billion yen. Komatsu maintained its full-year profit forecast at 138 billion yen.
The current rout in energy and commodities is an ongoing threat to Komatsu and its peers, reports Bloomberg. China’s slower growth has already depressed construction spending in the country and reduced its appetite to consume raw materials. Hitachi Construction Machinery Co. cut its full-year profit forecast by 27% last Thursday, the second revision in three months.
“Economic measures to underpin the economy, such as monetary easing, of the Chinese government fell short of bringing about clear outcomes from sluggish demand for construction equipment," Komatsu said.
Net income for the nine months ended December 31 2015 fell 11% to 103.7 billion yen, Komatsu reported.
For Komatsu, nine-month sales at its construction, mining and utility equipment business fell 5.1% from a year earlier. Profit at the business dropped 20% to 136.9 billion yen for the period.
Nine-month sales of construction and mining equipment in China plunged almost 40% to 52.3 billion yen, while revenue slipped 5.8% in Japan, according to the company’s earnings statement.
North America sales at the unit saw a 31% gain, while Middle East sales also grew, posting a 9.6% advance.
“In North America, while demand for equipment remained slack in the mining and energy sector, it was steady in the US residential construction and infrastructure development sectors, including highway construction,” the company said.
Caterpillar, the world’s biggest producer of construction and mining equipment, last week signalled no letup in the commodities collapse that begun more than four years ago, saying sales and earnings will drop further in 2016.
Peoria, Illinois-based Caterpillar reported last week that retail sales declined in all global regions last quarter as a demand slump in its energy-equipment business deepened.