China hits Komatsu sales

Komatsu has seen sales of construction equipment fall by 5.5% for the first three months of the fiscal year April 1 to June 30, compared to the same three months last year.

According to the Komatsu’s financial results, sales of construction, mining and utility equipment declined to JPY561,477 billion (US$5.165 billion) compared to the same three months in 2018, when sales were JPY646,060 (US$5.943 billion).

The profit of the construction, mining and utility segment dropped by 22% to JPY68.6 billion (US$631 million).

One of the main reasons for this decline in sales is the performance of the company in Asia, particularly China.

In the three months ending June 30, 2019, compared to the same period in 2018, sales in Asia dropped 27.5% from 86,004 to 62,383, with sales in China declining by 28.3%.

Komatsu blamed the growing uncertainty of the prospects of the Chinese domestic economy and the prolonged US-China trade war for the decrease in sales.

Sales in Japan remained steady at around 63,000, while demand slightly increased in North America by 2% to 143,434. Sales in Latin America slightly declined by 2.7%, while sales in Europe increased by 9.4% to 59,147 driven by markets in Germany, the United Kingdom and France, as well as eastern Europe.

The Middle East saw a 1.9% increase in sales but Africa dropped by 23.5%, something Komatsu attributed to a sluggish demand for mining equipment.