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(May 11, 2010)
| Sales | Operating Income | Net Income | |
|---|---|---|---|
| Fiscal year ended March 31, 2010 | 104,251 (-36.0%) | 612 (-94.1%) | -895 (-------) |
| Fiscal year ended March 31, 2009 | 162,767 (- 6.6%) | 10,365 (-42.3%) | 5,539 (-52.3%) |
Note: Listed values less than one million yen are rounded off.
Percentage indications of sales, operating income and net income show the ratio of increase or decrease respectively as compared with the previous fiscal year.
| Sales | Operating Income | Net Income | |
|---|---|---|---|
| Full-year term | 109,000 ( 4.6%) | 1,200 (96.0%) | 200 (-----) |
Note: Listed values less than one million yen are rounded off.
Forward-looking statements contained in this report are based on information available as of the date this report was prepared. A variety of factors may cause actual results to differ from projections.
The Japanese economy during this fiscal year saw improving corporate revenue, a halt in the downward trend of capital investment, and recovering exports and production. Nevertheless, employment and income conditions remained harsh, and prospects remained unclear.
Demand for mobile cranes declined dramatically as projects were delayed or suspended, including various overseas energy-related projects, and as domestic customers took a wait-and-see approach, delaying purchases.
In response to these dramatic changes in the business environment, the TADANO Group sought to secure net sales by mining new demand and by achieving dramatic cuts in production in various ways, including the temporary suspension of production. The Group also sought to reduce labor costs and general costs, reassigning human resources to activities targeting quality and service enhancements and launching full-scale cost-cutting activities to slash costs. By the end of this fiscal year, efforts to achieve major cuts in production and to secure net sales led to some success in the area of reducing inventory, the most pressing issue confronting management.
The dramatic changes in the business environment also led to significant declines in the profitability of American subsidiary TADANO MANTIS Corp. ("MANTIS"), acquired in December 2008. For this reason, we have chosen to book impairment losses following a review of MANTIS's goodwill at the end of the fiscal year. In connection with this move, MANTIS has been made a consolidated subsidiary based on our assessment of its significance for the Group.
With significant declines in the sales of mobile cranes and other products, domestic sales fell 34.5% compared with the previous fiscal year, to 48,059 million yen. Plummeting demand and a stronger yen resulted in overseas sales of 56,191 million yen, down 37.1 % from the previous fiscal year. Total sales fell 36.0% compared with the previous fiscal year, to 104,251 million yen. The ratio of overseas sales to total sales was 53.9%.
Despite efforts to cut overall labor costs and other expenses, ordinary income was down 97.1% from the previous fiscal year, to 297 million yen, due to major declines in sales and rising costs resulting from lower operating ratios and use of raw materials purchased when prices were high. The company reported a net loss of 895 million yen, vs. net income of 5,539 million yen in the previous fiscal year, primarily due to the booking of 835 million yen in impairment losses for MANTIS. Making MANTIS a consolidated subsidiary reduced operating income by 450 million yen, ordinary income by 471 million yen, and net income by 865 million yen.
Outline of Key Product Lines
Construction Cranes
In an environment in which businesses put off purchases due to concerns about economic prospects, a trend that cut sales by half, efforts to expand domestic market share resulted in the highest market share ever; domestic sales totaled 18,699 million yen, down 48.2% from the previous fiscal year. Major declines in demand and a stronger yen led to overseas sales of 47,012 million yen, down 36.3% from the previous fiscal year. Overall sales of mobile cranes fell 40.2% compared with the previous fiscal year, to 65,712 million yen.
Truck Loader Cranes
Demand for trucks fell to the lowest level ever recorded. Despite efforts to expand sales of new models offering improved mileage and quality, sales of truck loader cranes fell 38.6% compared with the previous fiscal year, to 6,808 million yen.
Aerial Work Platforms
Sales of aerial work platforms fell 30.7% compared with the previous fiscal year, to 8,283 million yen, due to precipitous declines in demand from the power and electric, telecommunications, and rental-industry sectors. This was despite efforts that resulted in the highest market shares ever.
Others
Sales of parts, repairs, used cranes, and other products and services were 23,447 million yen, down 21.4% from the previous fiscal year.
We expect the Japanese economy to improve gradually as exports continue to grow, despite sluggish private-sector demand. Overseas, the U.S. economy is projected to see a gentle recovery and the European economy to see low levels of growth. Emerging markets such as China are expected to continue driving the world economy.
In the markets in which the TADANO Group operates, while we expect various projects, including energy-related projects, to drive demand for mobile cranes, the Group's primary product, we also expect overseas demand to continue to decline due to the slow pace of recovery in the European and American markets and domestic demand to remain unchanged due to scheduled equipment replacements. Although domestic demand for truck loader cranes is expected to remain flat and domestic demand for aerial work platforms is projected to recover, conditions are expected to remain harsh for some time.
In light of dramatic changes in business conditions, the TADANO Group has suspended its Mid-Term Management Plan (08-10) since fiscal 2009 to focus on urgent countermeasures. In fiscal 2010, in addition to progress in securing sales by boosting market share and expanding sales of Group products, slashing costs through SVE(Super Value Engineering) activities, and achieving appropriate inventory levels, we plan to concentrate on quality and service Ethe sources of our competitive strength Eas well as on improving quality and reinforcing customer service systems.