Komatsu retail finance originations rise 13%

Japanese OEM Komatsu’s retail finance originations increased during the first nine months of the company’s fiscal 2023 due to favorable foreign exchange rates and higher construction sales.  

BY THE NUMBERS:  

Komatsu reported rises in retail finance originations, managed assets and revenues year over year during the first three quarters of its fiscal year, according to the company’s earnings presentation.  

The company reported for the nine months ended Dec. 31, 2023: 

• Komatsu’s retail finance originations landed at 757.9 billion yen ($5.3 billion), up 12.6% YoY; 
• Retail finance’s managed assets increased to $8.6 billion, up 10.1% YoY; 
• Retail finance revenues grew 17.5% YoY to $520.9 million; 
• North American construction, mining and utility sales to outside customers reached $5 billion, up 17.9% YoY; 
• North American construction, mining and utility sales to outside customers represented 27% of Komatsu’s total sales, up 1 percentage point YoY; and 
• North American equipment demand rose 4% YoY. 

STATE OF PLAY:  

Beneficial foreign exchange rates and higher construction sales contributed to the growth of retail originations, managed assets and revenue, Takeshi Horikoshi, director, senior executive officer and chief financial officer of Komatsu, said during the company’s earnings call today. 

“Assets increased from the end of the previous fiscal year due to the impact of foreign exchange rates and an increase in originations,” he said. “Originations volume increased year on year due to the impact of foreign exchange rates and higher sales of construction equipment.” 

FLASHBACK: Beneficial foreign exchange rates, higher construction sales and rising interest rates also occurred during the first quarter of the company’s fiscal 2023, which ended June 30.

NOTEWORTHY:  

Komatsu is focusing on the introduction and growth of its electric equipment operations, Executive Officer and General Manager of the Business Coordination Department Kiyoshi Hishinuma said during the earnings call. 

“Komatsu has positioned fiscal year 2023 as the first year of market introduction of electrified construction equipment,” he said. “In the construction equipment market, where the electrification market has not yet been formed, we will expand our product lineup and provide our customers with a wide range of products.” 

MARKET REACTION: Shares of Komatsu Ltd. (OTCS: KMTUY) were up 0.45% from market open to $26.98 as of market close today. Komatsu has a market capitalization of $25.22 billion.  

THE BOTTOM LINE:  

Improving supply chain conditions and the possibility of interest rate improvements leave Komatsu with a positive outlook, Hishinuma said. 

“I would say that the supply-demand balance has loosened to a certain extent, and I am not in a panic because the situation is not as tight as it used to be,” he said. “Interest rates are currently high, but there are prospects that they will come down in the future.” 

Editor’s note: All amounts have been converted to U.S. dollars. 

Registration is now available for Equipment Finance Connect. The dealer-centric equipment lending and leasing event of the year offers opportunities for dealers to learn new strategies, foster valuable partnerships and emerge with ideas to immediately apply to their businesses. Learn about free dealer registration at EquipmentFinanceConnect.com.