02.02.2016

Revenues rise at Kobelco Cranes

Kobe Steel has published its third quarter results which show improved revenues from the Crane business, while profits continue to decline.

Total crane revenues for the nine months were ¥55.4 billion ($459 million), up seven percent on last year, thanks to stronger demand in Japan, partially offset by slower demand in South East Asia. Pre-tax profits for the period fell 36 percent to ¥2.9 billion ($23.2 million)- due said the company, to “higher expenses related to quality maintenance and improvement of products”.

In the third quarter crane sales increased 3.5 percent to ¥16.4 billion ($135.9 million) while pre-tax profits fell 64 percent to ¥500 million ($4.1 million) due to the increased costs. It should also be pointed out that the previous year saw come substantial spikes in profits in the region of 60 percent, so the comparative is high.

The Kobelco Construction Equipment division, which will merge with Cranes in April, had a much tougher time with sales declining over 12 percent, while the company looks set to take a write off for bad debts in China, having accepted that it is unlikely to be paid for a substantial number of machines that were previously delivered.

Vertikal Comment

Kobelco Cranes continues to do well and signs are that its upcoming re-merger with the construction equipment division will not have a major impact on its operations. Hopefully it might actually improve its marketing and distribution in some parts Europe and other regions. The company builds an excellent product and where it has good representation excels. It still has a lot to go after, even before allowing for possible product line extensions such as telescopics and larger lattice models.