31.10.2018

Weak half for Tadano

Japanese crane and aerial lift manufacturer Tadano has reported lower first half profits on flat sales.

Total revenues for the six months to the end of September were ¥82.3 billion ($729.1 million) slightly lower than for the same period last year. At the same time pre-tax profits fell 32 percent to ¥5.7 billion ($50.3 million) mostly due to changes in product mix and exchange rates.

Looking at the detail behind the total revenues, mobile crane sales were 6.2 percent higher at ¥48.51 billion ($430 million), of which sales in Japan declined 1.3 percent to ¥17.9 billion ($158.8 million), while mobile crane sales overseas were 11.2 percent higher at ¥30.6 billion ($271.2 million).

Loader crane sales – which tend to be limited to Japan and Asia -were 4.7 percent lower at ¥9.6 billion (85.1 million) while aerial lift sales, also largely made in Japan, dropped 24 percent to ¥9.2 billion ($81.6 million). Other revenues - mostly parts, service and used equipment - were flat at ¥14.94 billion ($132.4 million).

Getting back to Mobile crane exports, Europe posted the strongest growth among Tadano’s leading export regions, with a 24 percent increase in sales to ¥9.5 billion ($84.4 million), but this is largely due to a comparison with a weak period last year when some All-Terrain products were not available to ship, and sales tanked 36 percent. North America remains the company’s largest export market with first half sales of just under ¥15 billion ($132.7 million). Asian revenues improved eight percent to ¥6.2 billion ($54.8 million) while sales to the Middle East were 58 percent lower at ¥2.56 billion ($22.7 million) following strong progress in the same period last year. Shipments to South America and the Caribbean were 31 percent higher at ¥582 million ($5.2 million) and sales in other markets were 51 percent up at ¥4 billion ($35.8 million).

The company is forecasting full year revenues of ¥185 billion ($1.64 billion) a 6.5 percent improvement on last year. Pre-tax profits – excluding one off charges – (Ordinary Profit) - are expected to come in four percent higher at ¥15.5 billion ($137.4 million) with sales growth of 17.3 percent for Mobile Cranes, 3.7 percent for loader cranes and 2.9 percent for parts and service, while sales of aerial lifts are expected to decline by more than 30 percent.

Vertikal Comment

Aside from the steep decline in aerial lift sales, this is a bit a bounce back for Tadano, following some challenges it faced last year, particularly in Europe. The company is making progress in several markets where sales were previously slow, but it still has some way to go in some markets. North America remains strong and the company appears to be taking a fair share of the improving market conditions. Its stake in Manitex is also likely to help.

New models such as the ATF 60G-3, new Rough Terrains and technically advance heavy-duty telescopic crawler cranes, and additions to production capacity and its move towards wholly owned dealerships, will also help the company improve its market share.

Tadano is likely to end its year fairly close to its forecasts and more importantly be in a good position for a strong year in 2019.

It will also be interesting to see what the company will have at Bauma. All in all a better result than at first it seems.