Komatsu results: 6.3% decline reflects global slowdown

The world’s second largest construction company, Komatsu, has released its results for the fiscal year to March 31, 2016, showing net sales of JPY 1,854.9 billion (US$ 16.69 billion).

The figure represents a fall of 6.3%, compared with the previous fiscal year.

In terms of its construction, mining and utility equipment business, Komatsu reported a total of JPY 1,640.0 billion (US$ 14.76 billion), down 6.9% from the previous year. The company’s profit within this segment declined 19.0%, to JPY 184.1 billion (US$ 1.66 billion).

Komatsu attributed the decline to reduced demand in China and other emerging countries, as well as a fall in sales of mining equipment.

It also reported, however, that it had been successful in capturing demand for general construction equipment in North America.

Nevertheless, operating income decreased 13.8% from the previous fiscal year, to JPY 208.5 billion (US$ 1.88 billion), while income before income taxes and equity in earnings of affiliated companies totalled JPY 204.8 billion (US$ 1.84 billion), down 13.2%.

Net income attributable to Komatsu Ltd. amounted to JPY 137.4 billion (US$ 1.24 billion), down 10.8%.

Looking to the future, and against a backdrop of falling demand for new construction and mining equipment, the company has applied itself to capturing aftermarket demand, reporting record sales of spare parts.

During 2015, with a view to reinforcing its business in Asia, Komatsu also opened a new plant in India for hydraulic excavators, and initiated a manufacturing subsidiary for construction equipment components in Myanmar.