Kubota sees profit staying flat for fiscal 2014
OSAKA -- Kubota Corp., Japan's leading manufacturer of farm equipment, expects net profit for fiscal 2014 to come in at 130 billion yen ($1.26 billion), relatively unchanged from the previous year's record-breaking level.
The Osaka company posted consolidated sales of 1.5 trillion yen in the year ended March 31, a 25% gain, it announced Tuesday. Net profit soared 69% to 131.6 billion yen, its first record in nine years, thanks to pent-up demand for farm equipment ahead of the April 1 consumption tax hike. In addition, construction machinery sales grew because of an increase in public works projects.
In the U.S., Europe and the rest of Asia, farm and construction machinery fared well. The yen's weakening was also a big plus on the profit front.
Kubota anticipates that fiscal 2014 sales will edge up 3% to 1.55 trillion yen, led by 940 billion yen raked in abroad, up 8%. In North America, sales are likely to grow for lawn mowers and small and midsize tractors. Sales of construction machinery will remain robust in Europe.
But the company's outlook in China, a growth market, is not as rosy. The Chinese government offers subsidies for purchases of agricultural machinery, but some of Kubota's products were stripped of their eligibility for subsidies in January. Kubota is seeking reinstatement, but its status is still uncertain. In the meantime, the company apparently plans to shoulder part of the subsidies, a move that would boost its sales and administrative costs in China.