Japanese manufacturing giant Komatsu has reported a year-end drop in profits across its construction, mining and utility equipment business divisions, with projections for the year ahead indicating a similar trend.
The company's operating income fell by 13.7% to ¥567.3 billion compared to the previous year, with Komatsu Ltd net income slipping by 14.4% to ¥376.4 billion.
However, despite retracted growth in sales volume, consolidated net sales for the construction, mining and utility business areas increased to ¥4132.8 billion, a slight increase of 0.7% on the previous year.
Overall, sales to international customers increased by 0.2% from FY2024 to ¥3,796.1 billion, with sales across Latin America, Europe, and Africa offsetting a reduction from Asia and Japan.
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However, in the mining segment alone, international sales slipped by 0.6% to ¥Y1,904.4 billion. And again, sales across Latin America, Europe, and Africa offset the decline in sales from Asia and Japan.
Construction industry customers in in North America and Europe propped up sales for the business segment, which increased by 1.1% ¥1,891.7 billion. Again, sales decreased in Asia and Japan.
While Komatsu anticipates an improvement in selling prices in the year ahead, sales are projected to decrease due to a decline in demand in certain regions affected by the situation in the Middle East, as well as a decrease in demand for mining equipment.
The company says it will continue to improve selling prices and reduce costs, but segment profit is projected to decrease due to rising costs, including the impact of U.S. tariff policies, as well as higher fixed costs and lower sales.
Last year, the company carried out field testing of a new diesel trolley truck in its new Power Agnostic (PA) series; began testing a hydrogen fuel cell-powered hydraulic excavator; advanced the development of software-defined vehicle (SDV); and collaborated with TIER IV Inc on new autonomous technology for construction equipment.
Looking ahead, Komatsu says it will accelerate compatibility with various power sources and advancements in automation and remote control through collaboration with other companies. The company also aims to expand the lineup and sales network of hard rock products and develop new underground extraction methods.
