TADANO Telescopic View
News | Sitemap | Contact Us
(November 19, 2007)
| Sales | Operating income | Net Income | |
|---|---|---|---|
| Interim period ended September 30, 2007 | 81,807 (19.3%) | 8,052 (32.2%) | 5,447 (40.0%) |
| Interim period ended September 30, 2006 | 68,544 (22.6%) | 6,092 (53.5%) | 3,890 (51.8%) |
| Full-year term ended March 31, 2007 | 144,693 | 12,762 | 7,689 |
Note: Percentagefigures represent comparisons to the interimperiod of the previousfiscal year.
(1)Outline for the first half of the current fiscal year 2008
In the first half of fiscal 2008, despite some areas of concern, the Japanese economy remained on a path of recovery on the back of improved production and exports, solid capital investment and favorable corporate performance, although personal consumption appeared to be at a standstill. Overseas, while there were concerns that the subprime problem might slow down the U.S. economy, steady economic growth was maintained in Europe.
Given this background, signs emerged in our industry that the rebound in crane rental rates for domestic customers was spreading along with surging domestic demand for construction cranes driven by replacement demand. In overseas markets, in addition to North America, where demand continue to be strong, favorable conditions continued in the European and Middle East markets.
During the interim period under review, in response to the recovery and expansion of demand for construction cranes in both domestic and overseas markets, the Group made every effort to boost production and sales and promote its Mid-term Management Plan. In marketing, while paying due consideration to allocation by destination amid a prolonged shortage of productsupply, we continued to maintain or improve sales prices in the face of the rising costs of primary materials, including steel, that have continued unabated over the past few years. In procurement and production, we endeavored to cut costs while seeking a balanced expansion in production capacity amid a growing production burden, taking into consideration suppliers, associated factories and our own production capacity.
In July, operations began at the Tadano Tadotsu Plant (Tadotsu, Kagawa Prefecture, total construction cost: approximately 2.7 billion yen), which was constructed as one of our initiatives to reorganize domestic plants. This marked the beginning of a production system geared to each product segment- construction cranes are manufactured at the Shido Plant, aerial work platforms at the Takamatsu Plant and truck loader cranes at the Tadotsu Plant. We also continued our work on the VE (Value Engineering) Project, which was launched last year to reduce costs from the development stage, and we expanded the Production Reform Project for boosting production efficiency to include the Tadotsu Plant in addition to the Shido Plant.
Bolstered by replacement demand for construction cranes, domestic sales rose 12.3% to ¥44,936 million, while overseas sales increased 29.2% to ¥36,870 million following a sharp increase in the sales of construction cranes in Europe and North America. As a result, net sales grew to ¥81,807 million, a 19.3% increase compared with the same period of the previous fiscal year. The ratio of overseas sales to total sales rose to a record-breaking 45.1%.
Ordinary income rose 30% to ¥8,249 million driven by increased sales. Interim net income rose 40% to ¥5,447 million, as we reported gains on the reversal of allowances for bad debts totaling ¥351 million. As a result, we accomplished growth in both sales and income for the fifth consecutive interim period.
Construction Cranes
In the domestic market, we focused on the sales of our mainstay 25-ton and 60-ton rough terrain cranes, in response to deep-seated replacement demand. Consequently, sales of construction cranes rose substantially by 24.1% to ¥20,056 million compared with the same period of the previous fiscal year.
In overseas markets, sales continued to be strong with the support of active construction and capital investments as well as expanded sales in priority markets, including North America, where demand surged and Europe and the Middle East, where demand was also on the rise. Overseas sales increased considerably by 39 % to ¥28,430 million compared with the same period of the previous fiscal year.
As a result, total sales of construction cranes were ¥48,486 million, a substantial increase of 32.4% compared with the same period of the previous fiscal year.
Truck Loader Cranes
As the cycle of replacement demand for trucks that meet new diesel emission regulations came to an end, leading to a significant decline in demand for trucks, we endeavored to boost the sales of truck loader craness by reinforcing sales activities targeting the rental industry. However, sales of truck loader cranes fell 86.2% compared with the same period of the previous fiscal year to ¥7,725 million.
Aerial Work Platforms
Sales of aerial work platforms rose to ¥6,820 million, up 18.1% compared with the same period of the previous fiscal year, as we concentrated our sales efforts on the rental market and telecommunications, which has been exhibiting particularly strong demand in the context of increased capital investment. Performance also benefited from our efforts to expand production.
Others
With respect to sales for parts, repairs and used cranes, while sales of used cranes remained flat compared with the same period of the previous fiscal year, our efforts including expanding sales of parts resulted in 6.8 % rise in sales to ¥15,996 million.
(2)Outlook for the full year
While sustained recovery is expected to continue in the Japanese economy and favorable conditions in the corporate sector are spreading into the household sector, some causes for concern remain, specifically the slowdown of the U.S. economy and fluctuating crude oil prices and foreign exchange rates.
Given this prevailing market environment, domestic sales of construction cranes are expected to continue rising due to the strength of ongoing replacement demand, while overseas sales of construction cranes are also expected to remain strong as we continue to focus on expanding sales in Europe as well as in the Middle East and North America. In Japan, however, we expect demand for truck loader cranes to decline with the end of the cycle of replacement purchases in response to domestic emission regulations.
Meanwhile, we face formidable challenges, such as reorganizing domestic plants, expanding production capacity to shorten delivery periods that have become prolonged, improving product costs and sales prices to bolster profitability, leveling out the concentration of sales towards the fiscal year-end, and further enhancing quality and services while fundamentally reducing costs to prepare for future reversals in demand and supply.
Under these circumstances, we will remain committed to expanding production facilities and increasing the production of construction cranes. We will also continue to pursue the VE (Value Engineering) Project and the Production Reform Project launched last year to achieve fundamental cost reductions and higher production efficiencies.
We will continue our uncompromising pursuit of safety and quality in the fiscal year ending March 31, 2008, while at the same time applying all our strength toward accomplishing the goals of the Mid-term Management Plan. Through these efforts, we are targeting sales of ¥168,000 million on a consolidated basis, with a 46% ratio of overseas to domestic sales, and ordinary income of ¥17,800 million for the fiscal year ending March 31, 2008.
The business performance outlook for the fiscal year ending March 31, 2008 is based on the production enhancement plan for construction cranes and the figures are based on foreign exchange rates of 115 yen to oneU.S. dollar and 155 yen to one euro. The above projections are based on certain assumptions derived from information available as of the day this report was released. Actual results may materially differ from the forecasts as a result of various unforeseen factors that may arise.