Komatsu Ltd., the world’s No. 2 supplier of construction equipment, said industry-wide demand from miners fell 13 percent in the last quarter, signaling that the rebound in commodities prices is yet to feed through into better sales of the giant trucks and excavators used in extracting minerals.

The Tokyo-based company, which also supplies builders and produces industrial machinery, reported lower earnings Tuesday for the third quarter through December, with net income down a fifth on the year to 30.8 billion yen ($271 million) and revenue slipping 10 percent to 430.6 billion yen, according to a statement.

“We stick to our earlier view that the timing of a recovery will come” in the next fiscal year or after, Yasuhiro Inagaki, senior executive officer, said on a conference call, referring to the mining equipment market.

Still, Komatsu is maintaining its full-year forecasts. Stripping out the impact of a stronger yen, which makes Japanese exports less competitive, overall sales were steady, the company said. It cited growth in markets such as China and Indonesia as outweighing sluggish demand in North America and the Middle East. For mining equipment, yen-based sales fell 4 percent in the quarter; excluding currency, they rose 7 percent, Chief Financial Officer Mikio Fujitsuka said on the call.

Komatsu follows industry leader Caterpillar Inc. and smaller Japanese rival Hitachi Construction Machinery Co. in reporting lackluster demand from the mining industry, which saw a rebound in raw materials prices in 2016. The Bloomberg Commodities Index rose for the first time in six years as China’s growth stabilized and the U.S. economy improved, lifting shares in Komatsu, which derives almost 80 percent of revenue from overseas, by more than a third over the year.

Bloomberg reports, larger miners remain cautious on spending and a recovery may not be felt until the second half of the new fiscal year, Hitachi Construction’s chief financial officer said Monday after its earnings. The third quarter was “surprisingly weak” and the company’s comments suggest hitting its full-year targets will be difficult, Credit Suisse Group AG said in a note.

Hitachi’s shares sank as much as 5.4 percent in Tokyo, while Komatsu closed 2.1 percent lower, before its earnings were released.

Brad Halverson, Caterpillar’s CFO, said last week he’s not ready to call a recovery in 2017 due to the abundance of used equipment, although the company said mining-related sales may have bottomed.


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