Komatsu’s Revenues, Profits Decline in Second Quarter

Komatsu, the world’s second largest construction equipment manufacturer, posted net income of JY15.6 billion (about U.S. $153 million) compared to JY32.5 billion in the second quarter of 2015, a 52-percent plunge. Sales dropped 13 percent to Y389.3 billion. Despite the decline, Komatsu last week reached a deal to acquire U.S. mining equipment manufacturer Joy Global for $2.89 billion, $3.7 including debt.
July 29, 2016
Komatsu, the world’s second largest construction equipment manufacturer, posted net income of JY15.6 billion (about U.S. $153 million) compared to JY32.5 billion in the second quarter of 2015, a 52-percent plunge. Sales dropped 13 percent to Y389.3 billion. Despite the decline, Komatsu last week reached a deal to acquire U.S. mining equipment manufacturer Joy Global for $2.89 billion, $3.7 including debt.Sales were heavily impacted by a construction slowdown in China, as well as slower demand in the mining industry. A fall in the price of oil and metals has also affected Komatsu as has a strong yen, which makes its products less competitive internationally.Profits slid 16 percent in Latin America, which is Komatsu’s sixth largest market. One bright spot was the CIS countries, including Russia and former Soviet republics where profits soared 35 percent thanks to a sharp jump in gold mining.Komatsu expects the integration with Joy Global to be smooth. The acquisition signals the company’s expectation in a rebound in the mining business, especially the underground mining space, as Komatsu currently produces only surface mining equipment.For more about Komatsu’s bid to acquire Joy Global, read: http://rermag.com/headline-news/komatsu-acquire-mining-equipment-manufacturer-joy-global-37-billion-deal

About the Author

Michael Roth

Editor

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.

Sign up for Rental Equipment Register Newsletters