Reasons for the revision
The domestic market condition surrounding the construction machinery industry is even severer due to controlled public spending, lower private sector capital investment, and other causes. Demand for hydraulic excavators, which is our leading product, is projected to see a major cut by about 30% from the preceding fiscal year. The market condition is thus extremely severe.
Under these circumstances, this company is working to increase its sales in the global market and is projected to be able to cover most of the slowdown in the North American market by the sales in China, Oceania and other regions. However, due to the great impact of the slowdown in the domestic market, sales is projected to see difficulty in achieving the previously projected level. The profit-and-loss aspect is expected to see a hardship as well. In addition to a decline in domestic sales and lower profits due to cuts in pricing, temporary extraordinary losses due to front-loaded additional early retirements and other reasons surpassed this company’s earlier plans. For that and other reasons, despite some rise in profits due to the weaker yen and cuts in overhead, this company’s current profit and current net profit both on a consolidated and on a parent-only basis eventually went below the previous forecasts. The result is, regrettably, this company is now projected to record a major deficit.
Fiscal 2002 ending March 31, 2003 is expected to see only a slight increase in sales but, in terms of profit and loss, it is expected to record a surplus due to the lowered break-even point due to reduced fixed costs.