11.11.2016

Profit slump for Tadano

Tadano has reported a weak first half compared to last year, with lower sales and a steep drop in profitability.

Total revenues for the six months were ¥90.91 billion ($855.1 million) 12.7 percent lower than at this time last year, mostly due to a fall in exports and currency exchange related issues. Sales in Japan were just 2.2 percent lower, at ¥49.8 billion ($468 million) with falling crane sales partly offset by higher sales of aerial work platforms. Overseas sales fell 22.8 percent to ¥41.2 billion ($387.1 million) with falling sales in North America and the Middle East partly offset by higher sales in Europe. Net profits for the period were ¥6.97 billion ($65.6 million) 35 percent down on last year.

The company has amended its full year forecasts downwards and now expects full year revenues to come in 14.1 percent lower at ¥180 billion, ($1.69 billion) with profits down 41.4 percent to ¥11.5 billion ($108.2 million).

The company said: “In our industry, the Japanese market shifted toward stronger demand overall, due to earthquake recovery and reconstruction, disaster preparedness and mitigation activities, efforts to address an ageing infrastructure, and private sector construction investment. While demand increased in Europe, it fell in North America and the Middle East due to the influence of crude oil prices, and demand in Southeast Asia fell along with slowing economic growth, leading demand outside of Japan to declined overall.”

“Despite focusing on plant and infrastructure demand, introducing new product models, and expanding new customer sales, our sales outside of Japan decreased by 22.8 percent from the same period of the previous fiscal year as demand trended downward.”

Vertikal Comment

This is not a great set of numbers from Tadano, and highlights the fact that is overly dependent on North America for export sales. This reflects on how its geographic spread is still too patchy for such a major company with globally acceptable products. It is exceptionally well established in some markets, such as the USA and Australia, as it is in the UK, but in the rest of Europe its coverage can be dire, the company is looking to change that, but still has a long way to go.

All that said, its main competitors would 'die' to have numbers as ‘positive’ as this, both of its main publicly quoted competitors reported substantial losses, however the sharp decline in revenues is a concern, and possibly reflects the fact that the its main competitors all have tower lines, which are doing very well at present, and helping offset falling Rough Terrain sales.

That said, Tadano is unlikely to be phased by this and will continue at its steady, pace to improve its global market coverage and penetration, all of which will help it increase its sales diversification away from Japan and North America, while increasing its global market share.