Mixed numbers from Kobelco

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Kobe Steel has published its third quarter results, which indicate higher unit shipments of cranes but production issues in Japan. 

Since Kobelco Cranes was integrated into the construction division we can no longer see the financial numbers for Kobelco Cranes. But a short statement in the accounts said that shipments of crawler cranes during the nine months to the end of December were higher in unit terms, apart from Japan where delays in pre-shipment inspections following the “crane collapse accident” at Kobe Steel’s Yakasago Works in July 2018. It added that demand in North America firm as it was in other overseas markets.

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Kobelco Construction revenues improved 11 percent to ¥297.1 billion yen, ($2.65 billion) due to higher sales of excavators, particularly in China, and the reversal of part of an allowance for retained receivables in the excavator business in China. Pre-tax profits increased just over 42 percent to ¥22.6 billion($205 million)

The company also issued an update on its ‘misconduct’ scandal which came to light last year, with a new policies and capital expenditure to prevent a reoccurrence. It seems that the steel and metals division knowingly provided customers with products that did not meet their specifications, in order to maximise profits. It seems that as long as the substandard material did not carry a safety risk the company lied about the specifications. A number of senior executives have also been fired.

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Expert Comment

It is a shame that we can no longer see Kobelco Cranes numbers, but it looks as though that sales are generally doing well, but that the failure of the 1,250 tonne 16000 J-H while on test at the plant has caused substantial disruption to domestic shipments, over and above any production issues, which would have been relatively minor. 

The company is though continuing to do well overseas, but mostly in markets where it is already strong, such as the USA, Netherlands and UK. A planned push into the German market announced in 2015, does not yet appear to have made any significant impact. It will be interesting to see what the company has at Bauma this April. 

With the merger of Cranes and Construction now behind it, expect a more positive year in 2019/20 for Kobelco crane sales.

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