Kubota reports Q2 FY2025 results as revenue and profit fall but outlook holds steady

JAPAN – Kubota Corporation, a farm machinery manufacturer, has announced its financial results for the second quarter of FY2025, reporting lower revenue and profit compared to the same period last year.

Despite the slowdown, the company says its performance remains in line with forecasts and has kept its full-year outlook.

For the six months ended June 30, 2025, revenue stood at ¥1,454.9 billion (US$9.86 billion), a 7.9 percent decline from ¥1,579.6 billion (US$10.70 billion) in the previous year.

Operating profit dropped 31 percent to ¥143.0 billion (US$0.97 billion), while profit attributable to owners of the parent fell 38.7 percent to ¥92.5 billion (US$0.63 billion).

Excluding the impact of exchange rates, Kubota noted revenue decreased by ¥101.0 billion (US$0.68 billion) and operating profit by ¥47.7 billion (US$0.32 billion).

Domestic sales in Japan rose 8.7 percent to ¥332.3 billion (US$2.25 billion), supported by demand for agricultural machinery as rice prices climbed.

However, overseas revenue dropped 11.9 percent to ¥1,122.6 billion (US$7.61 billion), reflecting sharp declines in North America and other markets. North American machinery sales fell 18.4 percent to ¥560.5 billion (US$3.80 billion), largely due to weaker sentiment in both the residential and agricultural tractor segments.

In the segment breakdown, Farm and Industrial Machinery posted revenue of ¥1,267.4 billion (US$8.59 billion), down 9.7 percent year-on-year, with construction machinery sales hit hardest at -21.1 percent.

Water and Environment, by contrast, recorded growth, with revenue rising 7.2 percent to ¥179.6 billion (US$1.22 billion) thanks to steady demand for ductile iron pipes and environmental equipment.

Profit factors

Kubota cited reduced sales volume, unfavorable exchange rates, and higher tariffs as key reasons for the decline in profit. Market-related factors accounted for a ¥67.3 billion (US$0.46 billion) drop in operating profit, while exchange rates had a negative effect of ¥21.4 billion (US$0.15 billion).

Despite this, cost control and new product launches helped partially offset the losses. In particular, the company highlighted the contribution of a mid-sized tractor model that has gained market share in some regions.

Kubota maintained its full-year forecast for revenue of ¥2,880.0 billion (US$19.52 billion) and operating profit of ¥220.0 billion (US$1.49 billion), both lower than FY2024 but in line with its February guidance.

The company expects overseas revenue to remain under pressure, especially in North America, but sees stable demand in Japan and signs of recovery in Asia and Europe.

In the United States, Kubota said the market has steadied since June after tariff-related disruptions earlier in the year. The company plans to focus on strict inventory management, flexible price adjustments, and strengthening its construction equipment and mid-sized tractor businesses.

Kubota is also advancing its business structure reforms, including optimizing its supply chain, reviewing financing programs, and shifting resources toward high-potential segments such as construction machinery.

The company added that it will continue capital-efficient management, prioritizing free cash flow generation over sales expansion. In the first half, free cash flow improved to ¥62.8 billion (US$0.43 billion) from ¥3.5 billion (US$0.02 billion) a year earlier.

“While the external environment remains challenging, Kubota is confident in its long-term growth strategy,” management stated in its outlook presentation.

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.