22.08.2006

Tadano Profits up 55%

Tadano has announced the results for its first fiscal quarter, to the end of June 2006. Revenues increased by 14 percent compared to the same period last year, to 30.7 billion yen ($265/£140 million).

60 percent of total sales were in Japan an increase of seven percent on 2005. Exports increased by 27 percent to 12.36 billion yen ($107/£56 million) or 40 percent of the company’s revenues.

Operating income for the quarter increased by 45 percent to 2.88 billion yen ($25/£13 million) or nine percent of revenues. Net income increased by 55 percent to 1.98 billion yen ($17/£9 million), a return of 6.5 percent.

Tadano has revised its estimates for the full year to the end of March 2007, it now expects revenues to come in around 12 percent higher than 2005/6, with net income rising by 20 percent to 6.7 billion yen ($58/£30 million).

Vertikal Comment

This is only the first quarter’s results from Tadano so not particularly representative of the full year. However with a respectable increase in exports coupled with a decent home market improvement and a world wide shortage of new and used cranes it seems odd that it should anticipate such a modest improvement in revenues and profits.

At the half year stage both Manitowoc and Terex have reported jumps in revenues in the region of 30 percent, while Tadano is looking at only 12 percent for the year.

In terms of operating income, the two large publicly quoted crane companies have seen operating incomes double and triple, thanks to increased volumes and higher prices. Tadano, it has to be said, is comparing to a more profitable period than the others being a quarter behind and having seen improvements in profitability sooner than the others. However it is forecasting an improvement of around 40 percent.

While a 40 percent improvement in operating income is nothing to be sneezed at, the current market for cranes is about as good as it gets. If Tadano does not do better than it anticipates, it will fall behind the other two, after being well ahead in terms of margins.