30.10.2015

Higher revenues, lower profits at Kobelco

Kobe Steel has released its half year numbers, which show increased revenues Kobelco Cranes, but falling profits.

Total revenues for the six months were ¥39 billion ($323.4 million) an increase of almost nine percent thanks to stable domestic demand. Pre-tax profits for the period declined almost 23 percent to ¥2.4 billion ($19.9 million), due, the company said, to higher expenses related to “quality maintenance and improvement of products”.

The company is now forecasting full year revenues of ¥76 billion ($630 million) compared to its original forecast of ¥78 million, ($647 million) due to revenues in Japan and North America, but lower sales in South East Asia. Pre-tax profits are expected to come in at ¥3.5 billion ($29 million), 22 percent lower than originally forecast. The second time the company has reduced its 2015/2016 forecasts.

Second quarter sales were 11 percent higher at ¥20.9 billion ($173.3 million), while a pre-tax profits were flat at ¥1.4 billion ($11.6 million).
No mention has been made in the results announcement of the possible re-merging of Kobelco Cranes with Kobelco Construction Machinery.

Vertikal Comment

It should be remembered that this year’s numbers are being compared to a strong upswing in both sales and profits for the same period last year. So while profits are significantly lower than are still substantially above the 2013 numbers. The company is looking at getting started in markets that it has ignored so far, such as Germany, but still has much to do to raise its presence and build its brand across a wider geographical region.