Komatsu has released its Q2 2012 financial results, in which it blames “unstable political conditions” for a decline in its sales in the Middle East and Africa region.
Globally it reported a 4.5% decline in net sales, a figure heavily impacted by a large drop in construction equipment sales to China, which fell by half.
Komatsu sales for Middle East and Africa declined slightly, and although demand for mining equipment remained strong in Africa, political instability in a number of Middle East and African nations impacted on the overall sales figures.
But the big news was the impact of the Chinese slowdown on Komatsu sales, with sales dropping by around 50%.
“The recovery of Chinese demand is slower than initially projected. Indonesian demand for mining equipment is softening mainly against the backdrop of falling prices of thermal coal,” said the company in its earnings statement.
“Although the [Chinese] government introduced the credit easing measure, there were still no clear signs for new projects to start. Demand for hydraulic excavators dropped to almost half in the first quarter under review from the corresponding period a year ago, and first-quarter sales dropped sharply from the corresponding period a year ago.”
Demand for construction equipment grew in a number of markets, including Japan and North America, but the increase failed to compensate for the reduced demand in China.
The company also downgraded its full-year revenue expectations, for the fiscal year ending March 31, 2013.
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