Tadano sales up but profits dive

Tadano has published preliminary results for the first quarter of its fiscal year - the three months to the end of June, which show a rise in revenues, while last year's profit has turned into a loss.

Total revenues for the period, increased seven percent to ¥43.2 billion ($407.3 million), while last year’s pre-tax profit of ¥1.35 billion ($12.8 million) compares with a loss of ¥694 million ($6.5 million) this year. The company said: "While net sales increased due to the consolidation of the Demag business, cost of sales ratio went up due to changes in the composition of sold cranes. The operating loss was the first recorded in nine years since the the first quarter 2011."

Looking more closely at the revenue numbers:

Mobile crane sales increased 13.6 percent to ¥26.6 billion ($250.4 million)
Loader crane sales dropped 23.5 percent to ¥4.3 billion ($40.3 million)
Aerial Work Platform sales declined 21.4 percent to ¥3.1 billion ($29.7 million) and
Other revenues - largely parts, services and used equipment - increased almost 25 percent to ¥9.2 billion ($87 million)

Breaking the mobile crane shipments down into more detail, sales in Japan fell 23.5 percent to ¥5.9 billion ($55.7 million), while exports increased 31.8 percent to ¥20.7 billion ($195 million), most likely due to the addition of Demag crane sales. Looking into the export markets Europe showed a strong rise, with sales up 88.6 percent on last year to ¥8.46 billion($79.7 million). North America also showed strong increases, rising 74 percent to ¥9.9 billion ($93 million). Sales in south/central America increased 148 percent to ¥1.8 billion ($17 million), conversely mobile crane sales in Asia dropped 22 percent to ¥2.8 billion ($26.7 million) and finally the Middle East improved 12.1 percent to ¥1.35 billion ($12.7 million).

While this is generally positive in terms of sales the company is forecasting that the first half revenues to the end of December, will come in more than 12 percent below 2019 levels at ¥88 billion ($829 million), with declines of 15 to 17 percent in all product sectors except for ‘Other’ revenues.

Mobile crane sales are likely to be 16 percent lower at ¥53.8 billion ($507 million) with exports declining seven percent to ¥36.3 billion ($342.1 million) with European sales expected to increase, but be more than offset by declines in North America, Asia as well as Japan, where a fall of 30 percent is forecast to ¥17.5 billion ($165 million). The company also anticipates further losses in the second quarter.

Vertikal Comment

These are just the preliminary results, the company has yet to comment or detail the changes, so we will update this item when they do. The key change in the first quarter however is almost certainly a result of the addition of Demag, which came on board in August, and it will also have a differential impact on the second quarter.

Given the challenges of both the Covid-19 pandemic and the integration of Demag, this is pretty good result. It will be interesting to hear more detail.


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