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Komatsu’s Q2 profits soar 76% as sales in China double

Komatsu’s profits rise by 76% to $472m in Q2 2017, compared to Q2 2016, thanks to a near doubling in its sales in China, where housing and other projects are driving demand for earthmoving equipment

The Komatsu 7000 shovel bucket miner at Bauma 2016 in Munich, Germany.
The Komatsu 7000 shovel bucket miner at Bauma 2016 in Munich, Germany.

Komatsu’s profits leapt 76% to $472m in Q2 2017, compared to Q2 2016, thanks to a near doubling in its sales in China, where a housing boom and the Silk Road Economic Corridor project is driving demand for earthmoving equipment.

The increase in profits was the biggest for the manufacturer in more than six years. The rise in sales was in part lifted by the acquisition of US mining equipment firm Joy Global earlier this year, but even when that impact was excluded, sales were still up 84%

However, the pace of growth in Chinese demand for construction and mining machinery is expected to slow over the course of 2017 – having experienced 55% growth already in 2016 – and is expected to end the year at an average of 5% to 10% growth.

“We'll be watching to see how strongly this recovery continues,” Yasuhiro Inagaki, senior executive officer at Komatsu, told Reuters Japan, adding that forecasts could change depending on any changes in economic policy by the Communist Party’s congress later this year.

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Construction Week - Issue 751
Oct 13, 2019