Hitachi Construction Machinery

Global

A Notice of Revised Year-round Earnings Forecast – Ending March 31, 2002

22 Feb, 2002

We are informing you that we have decided to revise the earnings forecast that we publicized when we reported our interim earnings on October 30, 2001 regarding our consolidated and parent-only earnings for fiscal 2001 ending March 31, 2002 (April 1, 2001 through March 31, 2002), and that we have decided to cancel the year-end dividend.

(in million yen)
1.Revision of our consolidated year-round earnings forecast (April 1, 2001 through March 31, 2002)
Ž Sales Current profit Current net profit
Previous forecast (A) 306,000 -5,000 -9,000
Present revision (B) 294,000 -10,600 -14,200
Change (B) – (A) -12,000 -5,600 -5,200
Change in percentage % -4 —- —–
[FYI] Last fiscal year’s performance
(fiscal 2000 ending March 31, 2001)
328,854 4,947 -3,195
(in million yen)
2.Revision of our parent-only year-round performance forecast (April 1, 2001 through March 31, 2002)
Ž Sales Current profit Current net profit
Previous forecast (A) 216,000 600 -7,200
Present revision (B) 203,000 -3,800 -14,400
Change (B) – (A) -13,000 -4,400 -7,200
Change in percentage % -6 —- —-
[FYI] Last fiscal year’s performance
(fiscal 2000 ending March 31, 2001)
224,617 6,726 1,165

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.

For your information
Ž [ Sales ] [Current profit ] [Current net profit ]
Consolidated 297,000 6,300 2,000
Parent-only 190,000 4,800 1,900

*Earnings forecast for fiscal 2002 ending March 31, 2003 (in million yen)

 

2. Year-end dividend for fiscal 2001 ending March 31, 2002

Quite regrettably, in view of this company’s worsened performance as described above, the extraordinary meeting of the Board of Directors held on February 21, 2002 decided to cancel the year-end dividend.
< For your information> Yearly dividend for fiscal 2000 ending March 31, 2001: 6 yen per share (interim dividend: 3 yen per share)

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