Japanese equipment manufacturer Komatsu reported increased retail finance originations in the first nine months of its fiscal 2024 as construction, mining and utility sales spiked.
The uptick in originations was “mainly due to the impact of yen depreciation,” Chief Financial Officer Takeshi Horikoshi said during the company’s Jan. 31 earnings call.
Increased receivables and a higher interest income ratio also contributed to retail finance growth, the company stated in its third-quarter earnings release.
BY THE NUMBERS: Komatsu reported the following for the first nine months of fiscal 2024, ending Dec. 31:
- Retail finance originations totaled 821.5 billion yen ($5.3 billion), up 8.4% year over year;
- Retail finance revenue rose 23.2% YoY to $594.9 million;
- Retail finance’s managed assets jumped 5.9% YoY to $9.1 billion;
- North American construction, mining and utility sales to outside customers reached $4.9 billion, up 5.5% YoY, and represented 28% of total sales, up one percentage point YoY; and
- North American equipment demand rose 3% YoY.
For the three months ending Dec. 31, 2024, the company reported:
- Retail finance revenue jumped 11.1% YoY to $195.3 million; and
- North American construction, mining and utility sales to outside customers totaled $1.7 billion, up 0.5% YoY.
STATE OF PLAY: Despite increased sales, profit from the construction, mining and utility sales segment fell 1.1% YoY and 1.4% YoY during the nine- and three-month periods ending Dec. 31, respectively.
The company attributed this decline to higher production and fixed costs, Horikoshi said during the call.
“The production costs increased by [$104.7 million] because of the steel prices, which has started to increase, because by Q2 it went up a lot,” he said. “And rubber used in tires, it started to increase too.”
MARKET REACTION: Shares of Komatsu (OTCS: KMTUY) were down 1.4% from market open to $30.18 as of market close Jan. 31. Shares were down 4.1% from market open to $28.95 as of market close today. The company has a market capitalization of $27.4 billion.
Editor’s note: All amounts have been converted to U.S. dollars.
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