Consolidated Business Results for Nine Months of the Fiscal Year Ending March 31, 2013

Komatsu Ltd. today announced its consolidated business results for nine months of the fiscal year ending March 31, 2013. The highlights are described below.

For the nine-month period (April 1 – December 31, 2012) of the fiscal year ending March 31, 2013, consolidated net sales declined by 6.8% from the corresponding period a year ago, to JPY1,350.5 billion (USD15,524 million, at USD1=JPY87). In the construction, mining and utility equipment business, total sales of construction equipment declined, as sales in China dropped to about half from the corresponding period a year ago. Meanwhile, sales increased in North America and Japan. With respect to mining equipment, while sales declined in Indonesia, as adversely affected by the falling price of coal, total sales increased, supported by steady sales of equipment for use in mines other than coal, as well as parts and service. All combined, however, nine-month sales in this business segment decreased from the corresponding period a year ago, as increased sales of mining equipment, parts and service fell short of compensating for lowered sales of construction equipment. In the industrial machinery and others business, sales of wire saws sharply fell. As a result, nine-month sales in this business segment declined from the corresponding period a year ago.
Profits were adversely affected by a big drop in sales volume from the corresponding period a year ago and declined nine-month sales in both businesses of construction, mining and utility equipment as well as industrial machinery and others. Operating income declined by 21.6% from the corresponding period a year ago, to JPY150.4 billion (USD1,730 million) for the nine-month period under review. Operating income ratio decreased by 2.1 points to 11.1%, and income before income taxes and equity in earnings of affiliated companies declined by 21.6% to JPY145.5 billion (USD1,673 million). Net income attributable to Komatsu Ltd. amounted to JPY91.0 billion (USD1,047 million), a decline of 29.6% from the corresponding period a year ago.

In the construction, mining and utility equipment business, Komatsu projects that demand of large, medium-sized and small equipment for use in mines in Indonesia, where Komatsu enjoys a large market share, will come under the estimation, as adversely affected by the falling price of thermal coal. In this light, Komatsu assumes that sales for the current fiscal year will fall short of the projection of July 31, 2012. Similarly, with respect to profits, while Komatsu can expect to benefit from effects of the Japanese yen's on-going depreciation in the fourth quarter period (January 1 – March 31, 2013), Komatsu predicts profits for the current fiscal year will be below the projections, as adverse effects of declined full-year volume of sales are considerable. Based on these conditions, Komatsu revises the projections of both consolidated net sales and profits for the fiscal year ending March 31, 2013 (April 1, 2012 – March 31, 2013) as follows.
Komatsu also revises the foreign exchange rates for the full year, which are preconditions for the current projections, as follows: USD1 = JPY82, EUR1 = JPY106 and RMB1 = JPY13.0 as full-year average rates.
(For the previous projections: USD1 = JPY79, EUR1 = JPY99 and RMB1 = JPY12.6)