Middle East reports marginal rise as China pulls down results of company’s first financial quarter
A small rise in the Middle East could not offset slowing sales in the Chinese market affecting the financial prospects of Komatsu as it reported a 5.5% year-on-year decline in sales in the first quarter of its financial year, which commenced on April 1.
The Middle East saw a 1.9% increase in sales for the Japanese giant but Africa dropped by 23.5%, which Komatsu attributed to a sluggish demand for mining equipment.
Komatsu’s financial results show sales of construction, mining and utility equipment falling to $5.6bn when compared to the $5.94bn recorded in the same period last year. At $631m, there was also a 22% drop in profit for the construction, mining and utility segment.
The company cited its performance in Asia, especially China, as one of the main reasons for the decline in sales. According to reports, in the three months ending June 30, Komatsu’s sales in Asia dropped 27.5% from 86,004 units to 62,383. Sales in China fell by 28.3% in the same period.
Komatsu blamed the growing uncertainty of the prospects of the Chinese domestic economy and the prolonged US-China trade war for the results.
Sales in Japan remained steady at around 63,000 units, while demand rose slightly in North America by 2% to 143,434. Sales in Latin America fell slightly by 2.7%, while European sales grew by 9.4% to 59,147 driven by Germany, France, the UK and eastern Europe.