Explanatory Meeting for the First Quarter Ended June 30, 2012 Outline of Answers to Main Questions
Q: What is your latest global outlook for this fiscal year for demand for hydraulic excavators?
A: The demand in China keeps vastly decreasing year on year, and the timing of the reversal in the Chinese market is estimated to be deferred. We also reflect factors such as slowdown in market growth in India, and estimate the global demand to be 217,000 units, a decrease of 4% year-on-year or 17,000 units. In other regions such as other Asia and Oceania, Japan, North America, etc., demand continues to remain solid.
In accordance with the change in the demand composition, sales in China for Fiscal 2012 to total consolidated sales is estimated to account for 13%, which is a large decrease when compared to that of Fiscal 2010 which was 27%.
Q: What is the situation regarding the market for mining machinery?
A: Demand for mining machinery including ultra large hydraulic excavators (100t over) and dump trucks (190t over), continues to remain solid. We have a backlog of orders for the amount of this fiscal year’s production, and are now negotiating for production in Fiscal 2013. Therefore, we are now working to expand production capacity at overseas and domestic plants.
Q: What is the reasons for revision for the consolidated earnings forecast for Fiscal 2012?
A: As for net sales, the deferred timing of the reversal in China and a slowdown in market growth in India have been factored in, which resulted in a total net sales forecast of 820 billion yen, an equivalent standard to the previous term. And for profit items, we will take measures against foreign exchange effects of weakened currencies in emerging markets such as the Indian rupee against the yen, by strengthening the sales system and enriching the software business (e.g., parts sales, service and sales of used equipment and recycled parts), in addition to lowering costs. As a result, the forecast was revised to 820 billion yen, an equivalent standard to the previous term, and forecasts for operating income, ordinary income and net income were revised to 72 billion yen (increase by 31% year-on-year), 62 billion yen (increase by 20% year-on-year) and 40 billion yen (increase by 74% year-on-year), respectively.
Q: What is the impact of TCM sell-off to UniCarriers Corporation?
A: According to the impact of TCM sell-off, we projected approximately 10 billion yen of extraordinary gains for the forecast for Fiscal 2012.