Subdued outlook from Hitachi

Equipment manufacturer Hitachi reported an increase in revenues and net income for the 12 months to 31 March, 2014, but has muted expectations for the coming year.

The company said net revenues for fiscal 2013 totalled JPY 803 billion (US$ 7.87 billion), up +4% year-on-year, while net income jumped +23.3% to JPY 28.9 billion (US$ 284 million).

The growth in revenues was fuelled by a +21% year-on-year increase in Hitachi’s domestic Japanese market, where sales totalled JPY 232 billion (US$ 2.27 billion).

The company said demand for hydraulic excavators had been brisk, supported by increased housing starts and public investments, including the need for reconstruction in the wake of the 2011 earthquake and tsunami.

Revenues also increased in the company’s Europe; Russia, CIS, Africa & Middle East; and China divisions, but dropped in its Americas and Asia & Oceania businesses.

Mixed outlook

Hitachi issued a mixed forecast for the 12 months ending 31 March, 2015. It said overall demand for construction machinery was expected to recover in Europe and the US, but remain at the same level in China, thanks to the government’s policy of placing more emphasis on reform than growth.

In Japan, the manufacturer said demand was expected to fall short of that of the previous year, “since rental demand seems to have completed a round”.

“We assume that the overall global demand will slightly increase,” the company added. “The demand for mining machinery is expected to remain at the same level as the previous fiscal year, because of the stagnant natural resource price.”

For the fiscal year 2015, Hitachi forecast net revenues of JPY 800 billion (US$ 7.84 billion), a -0.4% drop, while net income is expected to jump +56% to JPY 45 billion (US$ 441 million).