Komatsu has flagged modest sales growth in its mining business this year after a 37% year-on-year surge (in yen terms) in FY21, and also signalled that “M&A, investments and alliances” are options on the table. “Resources will be intensively allocated for the growth areas of construction and mining,” the Japanese manufacturer said this week.
Announcing its results for the year ended March 31, Komatsu said mining equipment, parts and service sales climbed to Y1082.3 billion in the period (US$9.65b at Komatsu’s nominal Y112.1: US$1 exchange rate for the year). It is projecting only 4% growth to Y1128.9b (US$9.57b at 118:1) in FY22.
The company said increased FY21 mining equipment demand centred on Asia, the CIS, Chile and Oceania. “In FY2022, demand will increase by 0-10% from FY2021,” it said.
Total Komatsu sales revenues climbed 28% yoy in FY21 to Y2802.3b (US$24.99b) while the company doubled net income to Y224.9b (US$2b).
The company’s dominant construction, mining and utility equipment business generated Y2779b (US$23.53b) of FY21 sales revenues, up 8.4% in yen terms for the year.
Komatsu acquired US-based Joy Global for US$3.7b in April 2017.
The company said this week priority areas for new R&D investment in construction and mining were electrification and automation. It is increasing R&D spend in its primary business area from US$615m to $640m this year.
Komatsu wants to expand its underground hard-rock mining business as “continuous structural reforms” ultimately shrink underground coal equipment opportunities. In surface mining, it aims to “promote open technology platforms” for mobile equipment control and automation, and “promote development of power agnostic trucks”.
At a macro level, Komatsu management see the global economic and geopolitical environment “undergoing intense change” over the next 2-3 years.
“Uncertainty is rising,” the company says. Drivers include growing competition between the US and China, and “economic security risks”; rising geopolitical risks; unstable supply chains; the growing international momentum towards decarbonisation and addressing water security and biodiversity conservation concerns; and accelerating digitalisation across various industries.