Decline in sales sends Komatsu profit tumbling 20% in first half of 2015

Updated Nov 20, 2015
Komatsu unveiled its D61-24 dozer in October.Komatsu unveiled its D61-24 dozer in October.

A continued lack of global demand for mining equipment and “drastically reduced” demand in China have led to reduced sales and profit halfway through Komatsu’s 2015 fiscal year.

The company, whose fiscal year ends March 31, reported sales of 892.4 billion Japanese yen ($7.2 billion), a decrease of 5.3 percent from the same period last year.

Profit was down 20 percent to 98.4 billion yen ($800 million).

The company attributed last year’s 3.5-percent sales gain to a steady increase in North American construction equipment sales.  The depreciation of the yen has allowed the company to more competitively price its machines to the point that the company’s main competitor, Caterpillar, publicly acknowledged it.

The company notes that as the yen has depreciated it has made efforts to reduce fixed costs “mainly through structural reforms on a global scale,” while also working to improve selling prices.

And though equipment sales in North America were “steadfast” during 2015’s first six month period, it wasn’t enough to offset the drooping demand for mining equipment that has affected both Komatsu and Cat for the last few years.

Meanwhile, in China and other emerging countries, a lack of demand for all equipment has only compounded matters.

Komatsu says its forecast for 2015 remains unchanged from expectations announced in April. The company expects sales to fall 5 percent to 1.88 trillion yen ($15.8 billion) in 2015 with profit falling 10 percent to 138 billion yen ($1.15 billion).