Komatsu expects profit to halve

Komatsu has cut its net profit projection for the fiscal year ending on March 31 to JPY 110 billion (US$ 1.24 billion) - a -47.2% fall on the figure of JPY 209 billion (US$ 2.36 billion) seen in the last fiscal year. Consolidated sales are expected to fall -9.5% to JPY 2.03 trillion (US$ 22.9 billion), compared to JPY 2.24 trillion (US$ 25.3 billion) last year.

The company had previously forecast sales and profits roughly in line with the previous year's performance, and it said it was on target fro these in the first half of the current fiscal year - up to the end of September last year. Its previous outlook was for continued brisk sales in emerging markets to offset weak areas such as Europe, Japan and the US.

However, a statement said, "The financial turmoil, which originated in the United States last fall, has adversely affected emerging economies, suddenly changing Komatsu's business environment. With a quick and drastic drop in demand around the world, Komatsu expects to face a similar challenging environment in the fourth quarter (January - March 2009)."

Besides falling demand, Komatsu said it was also suffering the effects of the Yen's recent appreciation against several key emerging market currencies.