Kubota reports mixed nine-month results as profit drops

JAPAN – Kubota released its nine-month results for the period ending September 30 and revealed weaker profit even though revenue stayed fairly steady.

The company stated that revenue reached ¥2.20 trillion (approx US $14.24 billion) compared with ¥2.27 trillion (approx US $14.70 billion) last year. Profit for the period fell from ¥217.7 billion (approx US $1.41 billion) to ¥166.1 billion (approx US $1.08 billion). An official noted that “we remain focused on stable operations as we near the end of the year.”

The drop in profit came from lower sales of farm equipment and construction machinery outside Japan. Farm equipment and engines brought in ¥1.48 trillion (approx US $9.58 billion) compared to ¥1.51 trillion (approx US $9.78 billion) last year.

Construction machinery also declined as some regions slowed their orders. Company managers said that “overseas demand came under pressure, but we kept our domestic sales stable.”

Regional sales and segment notes

North America remained Kubota’s largest market, bringing in ¥872.5 billion (approx US $5.65 billion). Sales in Europe stood at ¥257.0 billion (approx US $1.66 billion), while Asia outside Japan recorded ¥256.3 billion (approx US $1.66 billion).

Domestic sales in Japan rose from ¥457.3 billion (approx US $2.96 billion) to ¥501.9 billion (approx US $3.25 billion) as customers replaced older units and invested in new systems.

The Water and Environment division recorded better performance and reached ¥265.2 billion (approx US $1.72 billion) in revenue. The team credited strong orders for pipe systems and industrial products. One manager noted that “steady orders in Japan helped us hold our ground in this segment.”

Kubota also pointed out that it kept earnings per share at ¥124.10 (approx US $0.80) compared to ¥169.00 (approx US $1.09) last year. The company will maintain its planned dividend payout of ¥50.00 (approx US $0.32) for the full year.

Cash Flow and year end outlook

Kubota generated ¥210.7 billion (approx US $1.36 billion) in cash from operating activities compared to ¥150.6 billion (approx US $0.98 billion) last year. The company reported a drop in cash and cash equivalents from ¥295.1 billion (approx US $1.91 billion) to ¥222.1 billion (approx US $1.44 billion) at the end of the period as it continued to invest in new assets and repay borrowings.

Kubota kept its full year forecast unchanged. It expects revenue of ¥2.88 trillion (approx US $18.67 billion) and profit attributable to owners of the parent of ¥142.0 billion (approx US $0.92 billion). The company said that “we aim to keep our forecast intact as we manage the final months of the year.”

The report also noted that there were no major changes in subsidiaries, accounting policies or estimates during the period. Kubota will brief investors and analysts during a planned results call later this month.

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