01.05.2018

Challenging year for Tadano

Tadano has published its full year results for the fiscal year to the end of March, with steep declines in both revenues and profits.

Total revenues for the period were ¥173,703 million ($1.58 billion) 3.5 percent lower than in the prior year, with 43.8 percent of sales made outside of Japan. Pre-tax profits for the year were ¥14,676 million ($133.8 million) down 19 percent on the year.

Most of the decline in sales came from lower deliveries of mobile cranes in Europe, total Mobile crane sales were ¥99,022 million ($903 million) 9.7 percent lower than the previous year. Loader crane sales were marginally higher at ¥19,677 million ($179.5 million), while Aerial lift sales improved 6.4 percent to ¥24,678 million ($225 million) and other revenues – parts, service and used equipment was 11.4 percent higher at ¥30,324 million ($276.6 million).

Looking closer at the mobile crane revenues, European sales were 18.6 percent lower at ¥16,849 million ($153.7 million) this almost certainly due to the fact that shortages of a key component prevented the shipment of several new All Terrain models as well as some current units as the company redesigned tested alternative components. In contrast North American sales- which include far more Rough Terrain and truck cranes - were 15.7 percent higher at ¥29,428 million ($268.4 million).

The company expects a far better year in 2018/2019 forecasting sales to increase 10.5 percent to ¥192,000 million ($1.75 billion) with exports jumping to 52.7 percent of total sales. Pre tax profits are forecast to be 10.7 percent higher at ¥16,500 million ($150.5 million).

The revenue forecasts include a 25.7 percent increase in mobile crane sales to ¥124,500 ($1.13 billion) with European sales jumping 49 percent to ¥25,100 million ($228.9 million) as All Terrain sales bounce back and new models such as the new ATF600 G-3 start to ship. It also anticipates North America sales rising 21 percent, the Middle East 52 percent and Asia 11 percent. Meanwhile Japanese sales are expected to decline 6.9 percent.

Tadano also expects loader crane sales which are largely in Japan to be slightly higher in 2018, while it is anticipating a massive 33 percent drop in aerial lift sales. Possibly due to the lack of a large utility order in the year. Other revenues will improve three percent.

Vertikal Comment

This is an interesting set of numbers from Tadano, clearly if had not been for the collapse in European sales it would have had a flat year in terms of revenue. The company is still in a good place with new product likely to lead the way in the second half of the current year. It has also made some major changes to its European distribution model, having acquired Waterland Trading and built a strong team in France in a very short space of time. The group also has a good deal of potential to increase sales of its loader cranes and aerial lifts outside of Japan, although this is not currently on the cards.

In summary a poor result which the company has already reacted to, which ought put it back on track this year.