The slow down in global mining is hitting mining equipment makers hard. On Oct. 28, Komatsu, the second largest mining equipment maker in the world, cut its full-year profit forecast by 26 percent after its commodity-producing customers curtailed spending on new equipment.
Net income is estimated at 136 billion yen ($1.39 billion) in the 12 months ending March 31, down from the 184 billion yen projected in July, Tokyo-based Komatsu said in a regulatory statement.
The report comes about a week after Caterpillar, the largest equipment maker in the world, reported lower than expected earnings (ME, Oct. 23).
Slumping demand from mining companies in Latin America, Indonesia and Australia is overshadowing growth in Japan and a recovery in China, Komatsu said.
Caterpillar said on Oct. 23 that earnings will fall to about $5.50 a share on sales of $55 billion this year. In July, it forecast per-share profit of about $6.50 on sales of $56 billion to $58 billion.
For the first half ended Sept. 30, sales of construction and mining equipment in Asia outside Japan and China fell 30 percent to 91.9 billion yen, Komatsu said. Japan sales rose 13 percent to 150 billion yen, while China revenue gained 16 percent to 72.8 billion yen, Bloomberg reported.
BHP Billion Ltd. (BHP) and Rio Tinto Group, both Komatsu customers, are among mining companies that have cut billions of dollars of capital expenditure this year.