Latest news with #TakuyaImayoshi
Business Recorder
22-05-2025
- Business
- Business Recorder
US-China trade truce may ease Komatsu's tariff pain by $140 million, CEO says
TOKYO: Komatsu should see a nearly 20 billion yen ($140 million) mitigation in the impact of U.S. tariffs on its bottom line after the U.S.-China trade truce last week, the Japanese company's CEO said, suggesting its outlook for lower profits may not be as bad as feared. With more than one-quarter of Komatsu's sales coming from North America, the reduction in the tariff impact - a roughly 20% easing in its forecast of a 94.3 billion yen hit from the tariffs - would have an outsized effect on its profit outlook. In an interview with Reuters on Wednesday, Takuya Imayoshi, the head of the world's second-largest construction and mining machinery maker, did not say it is officially revising its forecast last month of a 27% drop in current-year profit as a result of U.S. President Donald Trump's tariffs. But the 90-day pause of extra U.S. tariffs on Chinese imports may mitigate the impact on Komatsu, which buys Chinese steel for its American-made machines, he said. 'Countries' retaliatory tariffs haven't been like what we previously feared, so the negative impact on our performance appears limited,' he said. The company forecast operating profit would be 478 billion yen for the business year to March 2026 because of the tariffs and a stronger yen, a far more conservative outlook than the consensus of analysts' estimates compiled by LSEG for operating profit of 597.5 billion yen, down only 9% from the previous year. Still, Imayoshi remained cautious on Komatsu's outlook, saying 'if tariff rates are adjusted with countries, the impact will likely settle within the previously made estimate.' Despite the easing of Chinese tariffs, about half of Komatsu products sold in the U.S. are manufactured overseas and imported, such as construction machines from Japan, Brazil and Thailand, which remain subject to higher levies. Supply shifts Komatsu would consider shifts such as bypassing U.S. warehouses when exporting spare parts to Canada or Latin America, and rebasing the production of U.S.-bound items from China to Thailand in case the higher U.S. tariff rates on China at the end of the 90-day truce, Imayoshi said. But 'it's never the case' that the tariffs can make manufacturing in the U.S. cost-competitive and drive Komatsu to ramp up U.S. production, he said, citing U.S. steel prices that are more than double those of China. Overall, tariffs will have little impact on its competition with Caterpillar, the world's biggest heavy equipment maker, and other rivals because they have similar global supply-chain structures, he said. However, Komatsu will watch how other companies pass on tariff costs, he added. Caterpillar last month estimated additional tariff-related costs at between $250 million and $350 million in the April-June quarter. Caterpillar shares are down 4.8% year-to-date, while Komatsu is up 1.5%. Chinese rivals Imayoshi, who led Komatsu's China office for three years from 2021, said competition with Chinese construction machinery makers is becoming as demanding as with Caterpillar. Komatsu 'still leads in durability and reliability, but they have largely caught up in offering decent performance at lower initial costs - in electrification, they are actually ahead,' Imayoshi said. Electrification and solutions for software-defined and autonomous vehicles require technologies from outside Komatsu, he said, suggesting these fields are a consideration for an acquisition after its 2023 purchase of Detroit-based battery startup ABS. The company has not made major purchases since buying U.S. mining equipment manufacturer Joy Global for $2.9 billion in 2017. Hapag-Lloyd boosted by US-China trade truce, CEO says In a mid-term business plan announced last month, Komatsu added a free cash flow target of 1 trillion yen in the next three years. 'We plan to spend it while maintaining balance between investments and shareholder returns, and it can also be directed toward acquisitions if opportunities arise,' Imayoshi said. 'Financial structure-wise, we have considerable leeway.'
Reuters
22-05-2025
- Business
- Reuters
Exclusive: US-China trade truce may ease Komatsu's tariff pain by $140 million, CEO says
TOKYO, May 22 (Reuters) - Komatsu should see a nearly 20 billion yen ($140 million) mitigation in the impact of U.S. tariffs on its bottom line after the U.S.-China trade truce last week, the Japanese company's CEO said, suggesting its outlook for lower profits may not be as bad as feared. With more than one-quarter of Komatsu's sales coming from North America, the reduction in the tariff impact - a roughly 20% easing in its forecast of a 94.3 billion yen hit from the tariffs - would have an outsized effect on its profit outlook. In an interview with Reuters on Wednesday, Takuya Imayoshi, the head of the world's second-largest construction and mining machinery maker, did not say it is officially revising its forecast last month of a 27% drop in current-year profit as a result of U.S. President Donald Trump's tariffs. But the 90-day pause of extra U.S. tariffs on Chinese imports may mitigate the impact on Komatsu (6301.T), opens new tab, which buys Chinese steel for its American-made machines, he said. "Countries' retaliatory tariffs haven't been like what we previously feared, so the negative impact on our performance appears limited," he said. The company forecast operating profit would be 478 billion yen for the business year to March 2026 because of the tariffs and a stronger yen, a far more conservative outlook than the consensus of analysts' estimates compiled by LSEG for operating profit of 597.5 billion yen, down only 9% from the previous year. Still, Imayoshi remained cautious on Komatsu's outlook, saying "if tariff rates are adjusted with countries, the impact will likely settle within the previously made estimate." Despite the easing of Chinese tariffs, about half of Komatsu products sold in the U.S. are manufactured overseas and imported, such as construction machines from Japan, Brazil and Thailand, which remain subject to higher levies. Komatsu would consider shifts such as bypassing U.S. warehouses when exporting spare parts to Canada or Latin America, and rebasing the production of U.S.-bound items from China to Thailand in case the higher U.S. tariff rates on China at the end of the 90-day truce, Imayoshi said. But "it's never the case" that the tariffs can make manufacturing in the U.S. cost-competitive and drive Komatsu to ramp up U.S. production, he said, citing U.S. steel prices that are more than double those of China. Overall, tariffs will have little impact on its competition with Caterpillar (CAT.N), opens new tab, the world's biggest heavy equipment maker, and other rivals because they have similar global supply-chain structures, he said. However, Komatsu will watch how other companies pass on tariff costs, he added. Caterpillar last month estimated additional tariff-related costs at between $250 million and $350 million in the April-June quarter. Caterpillar shares are down 4.8% year-to-date, while Komatsu is up 1.5%. Imayoshi, who led Komatsu's China office for three years from 2021, said competition with Chinese construction machinery makers is becoming as demanding as with Caterpillar. Komatsu "still leads in durability and reliability, but they have largely caught up in offering decent performance at lower initial costs - in electrification, they are actually ahead," Imayoshi said. Electrification and solutions for software-defined and autonomous vehicles require technologies from outside Komatsu, he said, suggesting these fields are a consideration for an acquisition after its 2023 purchase of Detroit-based battery startup ABS. The company has not made major purchases since buying U.S. mining equipment manufacturer Joy Global for $2.9 billion in 2017. In a mid-term business plan announced last month, Komatsu added a free cash flow target of 1 trillion yen in the next three years. "We plan to spend it while maintaining balance between investments and shareholder returns, and it can also be directed toward acquisitions if opportunities arise," Imayoshi said. "Financial structure-wise, we have considerable leeway." ($1 = 143.3000 yen)
CNA
28-04-2025
- Business
- CNA
Japan's Komatsu expects 27% profit fall this year on stronger yen, tariffs
TOKYO :Top Japanese construction machinery maker Komatsu on Monday forecast a 27 per cent decline in operating profit this financial year due to a stronger yen and new U.S. tariffs which will have an impact of more than $650 million. The company expects operating profit of 478 billion yen ($3.33 billion) for the business year to March 2026, after posting a record-high profit of 657.1 billion yen in the previous period, which marked 8.2 per cent growth. With robust mining equipment sales, a weak yen and successful price hikes, the positive 2024/25 result beat analysts' mean estimate of 605.7 billion yen in the data compiled by LSEG. Revenues came to 4.1 trillion yen and net income 439.6 billion yen, both historical highs for a third straight year. "On tariffs, we've already taken immediate measures such as bypassing the U.S. when we export from Japan to Canada," Komatsu chief executive Takuya Imayoshi told an earnings briefing. "We will consider changing sources globally or other mid-term efforts," Imayoshi, who took office earlier this month, said, adding that hiking prices in the U.S. is another possible tariff response. Komatsu, the world's second-largest heavy equipment maker after U.S. rival Caterpillar, earns more than a quarter of its sales from North America, making it vulnerable to repercussions of President Donald Trump's trade policy. About 50 per cent of Komatsu products sold in the U.S. are manufactured outside the country and imported, it said. In the current business year, the company factored in a 78.5 billion yen direct tariff cost as well as a 15.8 billion yen indirect impact from tariff-induced slower economic growth on equipment demand. Yen appreciation would also shave off 133 billion yen from its profit this year, Komatsu said. The company assumes an exchange rate of 135 yen per dollar, against 153 yen per dollar in the previous year. Komatsu also said it would buy back up to 4.3 per cent of its outstanding shares for 100 billion yen and cancel them. Shares in Komatsu closed on Monday 2.3 per cent higher than the previous trading day, beating benchmark Nikkei 225's 0.4 per cent growth. ($1 = 143.4200 yen)
