News Release

News Release of Kobelco Cranes Co., Ltd. > Kobelco Cranes’ Financial Results for Fiscal Year 2012 (April 1, 2012 – March 31

News Release of Kobelco Cranes Co., Ltd.

May 9, 2013

Kobelco Cranes Co., Ltd.

 

Kobelco Cranes’ Financial Results for Fiscal Year 2012

(April 1, 2012 – March 31, 2013)

 

General Market Conditions

 

Although the domestic market in the first half of fiscal year 2012 was weak, demand for mobile cranes got back on a recovery track from the second half as earthquake reconstruction shifted into full swing, from debris disposal to foundation construction. Additionally, the change of administration in Japan’s government at the end of year has been raising expectations for increase in public investment.

 

As for the overseas market, negative elements still continued from the previous fiscal year (fiscal year 2011), such as decreased demand in Europe due to financial instability, relatively higher local prices due to the strong yen, and a significant drop in demand in China and India due to financial restraint and other factors. Despite the shift to a weaker yen, customer appetite to buy did not improve in fiscal 2012. Demand in each region was stagnant, except for the strong market in North America owing to oil rigs and shale gas and steady demand in Southeast Asia.

 

Under these conditions, Kobelco Cranes increased its sales volume in Japan by accurately understanding the changes in demand trends. For sales overseas, it pushed forward with its marketing activities by trying to secure sales volume in regions of strong performance, including North America and Southeast Asia. However, it was unable to achieve higher profits  due to the impact of downsizing in some models and other factors. Operations in China and India did not contribute to profits as they were still at an early stage after establishment and there was a significant drop in demand.

 

Kobelco Cranes implemented cost reductions throughout the company, but the effect was limited. Consequently, consolidated net sales in fiscal year 2012 were 45,501 million yen, down 5.2% from the previous fiscal year. Consolidated ordinary loss was 2,250 million yen, a decrease of 2,411 million yen in comparison to the previous fiscal year.  Consolidated net loss was 2,845 million yen, a decrease of 2,173 million yen in comparison to the previous fiscal year.

 

 

Consolidated Financial Results for Fiscal Year 2012

(Unit: in millions of yen)

 

Net Sales

Operating Income (Loss)

Ordinary Income (Loss)

Net Income (Loss)

FY2012

45,501 

(2,108) 

(2,250) 

(2,845) 

(Year-to-year comparison)

(5.2%)

 

 

 

FY2011

48,005 

(0) 

161 

(672) 

*These figures have not been audited by an audit company.

 

Conditions at Overseas Strategic Bases

As previously described, demand in China and India fell significantly, but is anticipated to gradually recover from the second half of 2013 since there have been plans for infrastructure development, major projects and other work. Kobelco Cranes’ bases in these two countries have been working to expand production equipment and increase sales menus in order to meet such changes in demand.

 

Promotion of Cost Reduction

From the second half of fiscal year 2012, Kobelco Cranes has been implementing various measures to improve profits in fiscal year 2013, including further promotion of cost reduction by increasing procurement overseas, reducing inventory, and disposing non-performing inventory assets.

 

Outlook for Fiscal Year 2013

Demand in the domestic market is on an upward trend thanks to positive factors, including more reconstruction investment, the increase in public investment due to a change in the national government’s administration, and last-minute demand before the increase in the consumption tax.

 

In overseas markets, demand in North America and Southeast Asia is expected to remain steady, while demand in other areas is forecast to be either flat or on a slightly upward trend. Additionally, the yen has become considerably weaker compared to fiscal year 2012, lowering comparatively high prices in local currencies. Against a background of these increases in demand and positive factors for sales, sales volume both in Japan and overseas is anticipated to increase over fiscal year 2012.

 

Subsidiaries in China and India will continue with necessary investments in production equipment and efforts to reduce costs by increasing local procurement. To meet demand expected to recover from the second half of fiscal year 2013, these units will expand production and sales networks, aiming at contributing to profits, though to a limited extent.

Kobelco Cranes will strive to improve profits by reducing costs through increased overseas procurement, as well as increasing sales in each region.

 

Net sales in fiscal year 2013 are expected to be approximately 55,000 million yen and ordinary income is expected to be 0 yen.

 

Outlook for Fiscal Year 2013

                           (Unit: in millions of yen)

 

 

Net Sales

Ordinary Income (Loss)

Consolidated

FY2012

45,501

(2,250)

FY2013

55,000

0

 

Notes:

Exchange rate assumptions for Fiscal 2013: 1 US Dollar = 95 Yen, 1 Euro = 120 Yen

The forecast above is based on information current at the time of this announcement.

The actual results may differ significantly due to various factors in the future.

 

 

Page Top

 

KOBELCO

Copyright(C) 2016 Kobelco Construction Machinery Co., Ltd. All rights reserved.