Hitachi Construction Machinery


Explanatory Meeting for the Second Quarter Ended September 30, 2012 Outline of Answers to Main Questions

Q: What are the prospects for the mining machinery market for the term, and what is the cancellation status of mining machinery?

A: Mining machinery sales are expected to be 82.1 billion yen for the first half, and 182.1 billion yen for the full term. Despite cancellations that were made mainly related to coal mines in Indonesia, we predict that the investment plans of mining companies who are our customers will remain brisk in the future. Order backlogs of ultra-large hydraulic excavators and mining dump trucks are about for ten months and seven months, respectively.

Q: Price hike

A: In North America, this reflected a price increase that has been already determined. In Japan, the price hike was due to rental price rise.

Q: Profits are forecasted to significantly advance in the second half. What are the grounds for this forecast?

A: We plan to secure profits, by raising the sales proportions of mining machinery, its parts, and services, as well as by compressing inventory.

Q: What is the forecast for capital expenditure?

A: Capital investment in components for construction machinery will be reduced in FY12; however, capital expenditure for mining machinery business continues to be significant for our company.

Q: What is a major reason for the inventory (excluding industrial machinery) increase from the end of the first quarter?

A: The inventory increase is due to impacts of delayed deliveries and cancellations of mining machinery.

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