Weak start for Hitachi

Equipment manufacturer Hitachi reported drops in revenues and operating income for the first quarter ended 30 June, 2013, after being hit by declining demand for mining equipment.

Revenues fell -7% year-on-year to JPY 187 billion (US$ 1.9 billion) while operating income also slipped -30% to JPY 9.6 billion (US$ 97.5 billion).

Asia and Oceania, which represent Hitachi’s largest business segment by revenues, saw sales of JPY 54.7 billion (US$ 559 million), down -21% year-on-year. The manufacturer blamed decelerating demand from the mining sector in countries such as Indonesia and Australia, together with a fall in demand from the Indian construction equipment market.

However, revenues in China were up +35% year-on-year to JPY 32 billion (US$ 328 million), boosted by higher sales of construction equipment thanks to an increased urbanisation work in rural areas.

Meanwhile, revenues in Russia, CIS, Africa and the Middle East were unchanged compared to the first quarter of 2012 at JPY 16.5 billion (US$ 169 million).

In Europe, revenues increased +5.4% year-on-year to JPY 17.7 billion (US$ 180 million). Hitachi said signs of an economic upturn had been seen in some parts of the region, but demand for construction machinery still remained in a severe condition.

Finally, first quarter revenues in the Americas business were down -26% year-on-year to JPY 23.4 billion (US$ 239 million). However, Hitachi said demand for construction machinery in the US housing market continued to show steady growth.

Hitachi’s full-year 2013 earnings forecast was unchanged.