Q: What is the reason for the substantial negative figure of 23.4 billion yen in the “Mixed Account (Others)” in FY12 in the “Comparison of Consolidated Profit & Loss”? Also, why is the negative figure improved to 7 billion yen in the FY13 forecast?
A: Major factors in FY12 were a sales decline in the lucrative mining machinery sector and a demand shift to smaller types of machine in China. In FY13, the “Mixed Account” is expected to improve, because demand is likely to recover in China, including that for mid- to large-machines.
Q: Adverse conditions seem to be continuing in the mining machinery market. Are you considering reducing the selling price with the current depreciation of the yen? Will there be any changes in profitability in FY13 compared to the previous fiscal year?
A: We do not plan to revise selling prices due to foreign exchange fluctuations. We point out our high operation rates, and the safety and reliability of our products to our customers, by providing total solutions. We believe that profitability in FY13 will be at the same level as that of the previous year, even allowing for the foreign exchange impact and changes in regional and product mixes.
Q: What will be the foreign exchange sensitivity in FY13?
A: A one yen fluctuation against the US dollar and Euro would impact our annual operating income by 2 billion yen and 300 million yen, respectively. Also, a 0.1 yen fluctuation against the Chinese yuan would impact our annual operating income by 300 million yen.
Q: What are the prospects for future demand for hydraulic excavators in China?
A: There are signs of recovery in some types of machines including small machines. Full-term demand for hydraulic excavators in FY13 is estimated to be 51,000 units, an increase from 42,000 units in the previous year, reflecting the forecast that demand is likely to exceed that of the previous year after the summer in 2013.