Komatsu’s net income declined 63 percent in its 2009 fiscal year ended March 31, dropping from 78.8 billion yen (about U.S. $796 million) compared with 208.8 billion yen in fiscal 2008. Net sales dropped from 2.243 trillion yen to 2.021 trillion yen (about U.S. $20.4 billion).
Demand dropped particularly in the second half of Komatsu’s fiscal year in the construction, mining, industrial and utility equipment businesses. Consolidated sales in construction, mining and utility declined 14.8 percent year over year. Demand fell sharply in Japan, affected by reduced private-sector investment, sluggish housing starts, and slowing exports of used equipment from Japan. In North America, demand from the mining sector remained strong, but North American and European demand for construction equipment decreased significantly.
Demand for equipment in China also dropped, although support by the Chinese government’s economic stimulus package fueled public works such as post-earthquake reconstruction work in Sichuan Province. Still, sales in China decreased from the previous year, although not as dramatically as in North America, Japan and Europe. Based on its projection that the Chinese market will continue to expand because of population growth and urbanization, Komatsu continued to aggressively launch new products and reinforce product support operations. Komatsu acquired land in Changzhou to build a new plant.
Sales increased in industrial machinery to 277 billion yen (about U.S. $2.8 billion).
Overall Komatsu expects a challenging environment for some time, and has consolidated and eliminated plants and production lines in Japan, North America and Europe, reorganized its sales organization in Japan, and reduced fixed costs groupwide. It expects a 24-percent drop in sales in fiscal 2010 to $1.53 trillion yen, and expects operating income to decline 52.6 percent to 72 billion yen.
Komatsu is based in Tokyo, with U.S. headquarters in Rolling Meadows, Ill.