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(May 22, 2009)
| Sales | Operating income | Net Income | |
|---|---|---|---|
| Fiscal year ended March 31, 2009 | 162,767 (- 6.6%) | 10,365 (-42.3%) | 5,539 (-52.3%) |
| Fiscal year ended March 31, 2008 | 174,360 (20.5%) | 17,960 (40.7%) | 11,619 (51.1%) |
Note: Listed values less than one million yen are rounded off.
Percentage indications of sales, operating income and net income show the ratio of increase or decrease respectively as compared with the previous fiscal year.
| Sales | Operating income | Net Income | |
|---|---|---|---|
| Full-year term | 125,000 (-23.2%) | 4,100 (-60.4%) | 2,200 (-60.3%) |
Note: Listed values less than one million yen are rounded off.
Forward-looking statements contained in this report are based on information available as of the date this report was prepared. A variety of factors may cause actual results to differ from projections.
During the period under review, the Japanese economy remained under severe pressure as corporate revenues plunged, primarily due to rising costs driven by surging raw material prices in the first half of the year and declining exports caused by the deteriorating global economy in the latter half. Personal consumption, moreover, remained weak under the influence of worsening employment and income conditions.
Under these circumstances, demand weakened in our industry from the start of the latter half of the fiscal year, as domestic demand for construction cranes fell in the wake of customers of conservative purchasing policies. Demand also stagnated in overseas markets due to changes in the fund procurement environment as well as the suspension and postponement of energy-related projects.
The Tadano Group had been boosting production in the first half of the year based on solid demand for construction cranes in the domestic and overseas markets. However, the dramatically altered business environment necessitated extra effort to secure sales as demand declined rapidly in the domestic market and weakened overseas. On the procurement and production front, we were left with no choice but to reverse our initial stance and adjust production to reduce inventory.
On the other hand, we sought to further enhance our LE (Lifting Equipment) business by acquiring U.S. crane maker SpanDeck, Inc. (trading name subsequently changed to Tadano Mantis Corp. in May 2009) for $37.5 million USD in December 2008.
Domestic sales fell 20.9% to 73,413 million yen compared with the previous fiscal year, as sales of construction cranes declined in the latter half of the fiscal year. Overseas sales rose 9.6% over the previous fiscal year to 89,354 million yen due to an increase in the sales of construction cranes in the European and North American markets. As a result, total sales decreased 6.6% to 162,767 million yen. The ratio of overseas sales to total sales was 54.9%.
Despite efforts to cut expenses, ordinary income fell 42.5% to 10,331 million yen due to higher costs driven by rising raw material prices and declining sales in the latter half of the fiscal year. The company reported 517 million yen in transfers from the allowance for doubtful accounts as an extraordinary income, and 951 million yen in write-down of investment securities as an extraordinary loss; as a result, net income fell 52.3% compared with the previous fiscal year to 5,539 million yen.
Outline of Key Product Lines
Construction Cranes
The domestic market exhibited a sudden drop in demand as customers concerned with the economic outlook held off purchases. As a result, sales dropped 14.8% to 36,091 million yen compared with the previous fiscal year. In overseas markets, sales increased by 17.8% to 73,815 million yen over the previous fiscal year due to expanded sales, primarily in Europe, North America and the Middle East. As a result, sales of construction cranes rose 4.7% to 109,906 million yen compared with the previous fiscal year.
Truck Loader Cranes
Demand for trucks continued to recede despite efforts to expand sales by launching new models featuring enhanced mileage and quality, resulting in a 27.3% decline in sales of truck loader cranes to 11,084 million yen compared with the previous fiscal year.
Aerial Work Platforms
Demand from the telecommunications market peaked in the first half of the previous fiscal year while demand from the rental industry fell considerably due to restrained capital investment. Under these circumstances, we managed to increase our market share as efforts to expand sales paid off. Sales of aerial work platforms nevertheless dropped significantly by 20.1% to 11,957 million yen compared with the previous fiscal year.
Others
Sales of used cranes declined due to the rising yen and falling demand, and total sales of parts, repairs, used cranes and other items decreased 10.9% to 29,818 million yen compared with the previous fiscal year.
We expect the Japanese economy to sink deeper into recession as the decline in corporate revenues drags down capital investment and as personal consumption slackens due to deteriorating conditions on the employment and income front. We likewise expect harsh times will continue overseas due to the growing impact of the global financial crisis and concerns over further economic stagnation.
In the market environment surrounding the Tadano Group, we expect demand for construction cranes to fall in the domestic market due to customersf conservative purchasing policies as well as in the overseas markets due to changes in the fund procurement environment and the suspension and postponement of energy-related projects. Domestic demand for truck loader cranes and aerial work platforms are also expected to remain weak. We therefore expect overall business conditions to remain harsh in the near term.
In light of the dramatic change in business conditions, the Tadano Group will for the time being suspend its Mid-Term Management Plan (08-10) to concentrate on emergency response during fiscal 2010. In concrete terms, we will reduce excess inventory caused by the rapid fall in demand, secure sales by boosting market share, cut the cost of sales, and endeavor to fundamentally bring down expenses. At the same time, we will focus our efforts on quality and service, which constitute the source of our competence, by further enhancing quality and reinforcing customer service systems.