12.05.2021

Tadano ends year in the red

Japanese crane and aerial lift manufacturer Tadano has issued its full year results for the 12 months to the end of March.

Total revenues were 18.4 percent lower at ¥186 billion ($1.8 billion) with a pre-tax loss of ¥12.36 billion ($113 million), compared to a profit last year of ¥12.04 billion ($110 million).

The revenues are made up of ¥109.4 billion ($1 billion) of mobile cranes, ¥19.3 billion ($177 million) of loader cranes, ¥18.7 billion ($171 million) of aerial lift sales and ¥38.6 billion ($353 million) of other revenues - mostly parts, services and used equipment.

Looking more closely at the mobile crane sales - which makes up 59 percent of total revenues - ¥39.6 billion ($362 million) came from Japan, while exports totalled ¥69.8 billion ($638.3 million). Total revenues were split almost equally between export and domestic, with Japan making ¥93.28 billion ($852.8 million), 10.8 percent lower than in 2019/20, while total exports sales totaled ¥92.8 billion ($848.1 million), a fall of 24.8 percent.

A geographic breakdown of total revenues by major region shows that North America remained the largest export market with sales of ¥35.1 billion ($320 million), although that was down 35.4 percent on the year. European sales actually increased by 13.4 percent to ¥27.6 billion ($252.6 million) thanks to the greater contribution from Demag in this financial year. In South America mobile crane sales dipped 54 percent to ¥3.1 billion ($28.3 million), Asia slipped 23.5 percent to ¥11 billion ($100.7 million), revenues in the Middle East dropped 42.8 percent to ¥5.9 billion ($53.9 million) and other regions declined 24.7 percent to ¥10.1 billion ($92.6 million).

In terms of market share by units, Tadano claims 53 percent of the domestic market, while in Europe it believes that its share slipped from 19 to 13 percent due to the consolidation of the Demag business into the group and in North American market share declined from 35 to 31 percent.

The company’s outlook for the current financial year is for sales to increase 15.6 percent to ¥215 billion – almost $2 billion. At the same time, it expects a return to profitability with a pre-tax profit of ¥10.5 billion ($96 million). The improvement will be almost entirely driven by a 27 percent increase in mobile crane sales.

Vertikal Comment

Tadano provides an incredible amount of information in its reports, which can make it all quite challenging to write up. That said, this is not a great set of results, but given all that has happened in the past 18 months, including its decision to go through a major restructuring process in Europe as it moves towards a full merger of Demag and Tadano - including placing both European operations into administration - it is perhaps, understandable.

The company has a traditional policy of focusing on the longer term and not getting too upset over short term challenges or setbacks. One assumes that this policy will continue under new chief executive Toshiaki Ujiie who took over from Koichi Tadano at the start of the new financial year in April.

While it looks as though the company will begin to bounce back in 2021/22, it still has a great deal of work left to do in the face of some formidable competition, to win back lost market share and move beyond. As a result, it is likely to take more than a year or two, to reap any benefits from its acquisitions and restructuring. If it holds firm to the strategies it has set out, it could well emerge as a serious challenger for mobile crane market leadership but not before - let's see... 2025, 2026?

This year's performance will, of course, provide an indication of what to expect.