07.08.2008

Profits slip at Tadano

Tadano, Japans leading crane producer, has issued its results for the first quarter of its new fiscal year. Sales increased by three percent to ¥39 billion ($357 million) while operating income increased by less than two percent to ¥3.4 billion ($31.2 million).

Net income however slipped by over 21 percent to ¥2 billion ($18.7 million) due to product mix, higher sales and administration costs and smaller exchange rate gains than last year.

Tadano says that the Japanese economy is beginning to slow down as costs for primary materials and energy rise curbing growth in capital investment and personal consumption. This caused domestic sales to fall 11.4 percent to ¥17,748 million ($162 million), with sales of truck loader cranes and aerial platforms declining while mobile crane sales grew slightly.

Overseas it cites the “stagnant” U.S. economy and a gradually slowing European economy as issues and yet export sales rose by 19.2 percent to ¥21,340 million ($195 million) due to an increase in the sales of mobile cranes in Europe and North America.

The company adds that “Under these circumstances, the Group has been working, since April, on the Mid-Term Management Plan (2008-10) with the basic strategy of overcoming market fluctuations toward achieving a new trajectory of growth.”

Vertikal Comment

Tadano has taken a gloomy view of the crane market in comparison to Manitowoc, Terex and Liebherr. It realises that it has been over dependent on its domestic market and has managed to increase its export sales levels.

Given that its exports outside of its ‘local region’ are largely US style truck mounted cranes and Rough Terrains it has not managed to penetrate too many western markets with its Japanese built products. Its Tadano-Faun All Terrain cranes are extremely well regarded in terms of performance and quality, but the company has failed to expand its German plant sufficiently to keep pace with its growing product range and popularity.

In addition to what it is doing in China and the Pacific Rim, not to mention the Middle East, Tadano needs to do more to expand its sales in Europe, but to do that it needs to build more All Terrains and to approve some of its high speed Rough Terrains, truck cranes and City cranes for sale in Europe.

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