03.08.2018

Slow start for Tadano

Tadano has reported its first quarter results to the end of June, with slightly lower revenues, and a steep fall in profits. As a result, the company has revised its first half forecasts, but is maintaining its original full year forecast.

Total revenues for the quarter slipped around one percent to ¥34.894 million ($313.8 million) due to a 3.5 percent fall in export sales to ¥16,173 million ($145.4 million), while sales in Japan improved 1.4 percent to ¥18,720 million ($168.3 million). Pre-tax profits slipped 19 percent to ¥2.2 billion ($19.9 million).

Mobile crane sales were flat at 18,924 million ($170.1 million) of which ¥6,296 million ($56.6 million) occurred in Japan, up 11.9 percent on the year, while exports slipped 5.5 percent to ¥12,628 ($113.6 million).

Loader crane sales declined 5.5 percent to ¥4,340 million ($39 million), Aerial lift sales dropped almost nine percent to ¥4,335 million ($39 million). Other revenues – parts, service and used equipment totalled 7,293 million ($65.6 million)

The mobile crane exports were made up as follows:
European sales jumped 30.1 percent to ¥3,980 million ($35.8 million), while sales in North America dropped 17.8 percent to ¥5,560 million ($50 million). Asia was 8.1 percent higher at ¥3,064 million ($27.5 million), the Middle East dropped 43 percent to ¥1,559 million ($14 million), South America rebounded 22 percent to ¥207 million ($1.86 million) and other regions jumped 47.7 percent to ¥1,081 million ($9.7 million).

The company has reduced its half year forecasts from ¥90 billion ($809 million) to ¥83 billion ($746 million) due mostly to a 9.4 percent fall in sales to Japan, but this is would still be marginally up in the first half of last year.
It is though maintaining its full year forecasts of revenues climbing 10 percent to ¥192 billion ($1.7 billion), with pre-tax profits rising 11 percent to ¥16.5 billion ($148.5 billion).

Vertikal Comment

In terms of revenues this result is not dreadful, but the fall in profitability surprising, die to a range of factors, from currency fluctuations, to higher sales and administration costs and customer mix. Reducing the first half forecast but maintaining the full year estimates looks like a ‘Jam tomorrow’ scenario, but Tadano has a pretty good reputation for its full year forecasts and given the forecast breakdown, it does look like this is a timing issue as much as anything. We would be fairly confident of it achieving or coming very close to it.

The company has plenty of upside potential for export sales and may well do better in Japan than it is forecasting.