Increased sales, improved selling prices and depreciation of the Japanese yen drove Komatsu’s net sales up 9.1% for the 2023 fiscal year, ended March 31.
According to the company’s earnings report, net sales for the year totaled JPY 3,865.1 billion, operating income rose to JPY 607.2 billion, and net income increased to JPY 393.4 billion.
The company reports that demand for construction, mining and utility equipment decreased in Latin America, Europe and Asia, but remained steady in North America. Stable resource prices also helped drive strong demand for mining equipment. Sales for the segment increased 9.7% comparted to fiscal year 2022, to JPY 3,615.2 billion.
Komatsu’s retail finance segment saw revenues rise by 20.9% to JPY 103.5 billion for the year, due to growing interest rates and the positive effects of foreign exchange rates.
Industrial machinery sales, which includes presses, sheet metal machines and machine tools for the automobile manufacturing industry, rose 2.5% over the previous year to JPY 195.6 billion, driven by due increased sales of large presses.
Fiscal Year 2024 Outlook
Looking forward, Komatsu projects a decrease in both sales and profits for the 2024 fiscal year as demand for mining equipment will remain flat in most regions and demand for construction equipment will decline. Komatsu attributes the decline to continued high interest rates and energy prices. In addition, Komatsu projects that the Japanese yen will appreciate, causing sales to decrease from the 2023 fiscal year.
In the retail finance business, Komatsu expects an increase in revenues, driven by rising interest rates, but a decline in segment profit, due to reduced resale profits of used equipment after leasing use.
The company anticipates that both sales and segment profit for its industrial machinery segment will rise, due to expected recovery of maintenance revenues of the excimer laser-related business for the semiconductor industry.
Komatsu is reassessing the investment relationship within the Komatsu Group, such as bringing Latin American subsidiaries managed by a North American subsidiary under direct control of the company. “Even if such a change of investment relationship is carried out, the impact of this matter on consolidated business results for the fiscal year ending March 31, 2025 will be minimal,” the company said.
