Hitachi Construction Machinery (6305) Q1 2024 earnings summary

Executive summary

• Revenue reached ¥328.2B, up 4% year-over-year, marking a Q1 record for the third consecutive year, driven by Americas and yen depreciation, but adjusted operating income fell 13% and net income dropped 22% due to weak sales in Europe and Asia.

• Mining and value chain businesses saw revenue growth, especially in parts and services, offsetting declines in other regions.

• Americas and Oceania contributed positively to revenue, while Europe and Asia experienced significant slowdowns.

Financial highlights

• 1Q FY2024 revenue: ¥328.2B (+4% y-o-y); adjusted operating income: ¥32.5B (-13% y-o-y); net income attributable to owners: ¥24.6B (-22% y-o-y); gross profit: ¥103.8B.

• EPS was ¥115.58, down from ¥147.74 year-over-year.

• Overseas revenue ratio increased to 87% from 86% year-over-year.

• Operating cash flow turned positive at ¥8.3B, free cash flow improved to -¥4.2B from -¥28.8B year-over-year.

• Total assets rose to ¥1,904.5B, equity attributable to owners at ¥805.4B.

Outlook and guidance

• FY2024 revenue forecast unchanged at ¥1,370B (+2.6% y-o-y); adjusted operating income expected at ¥165B (-2% y-o-y); net income projected to rise 5% to ¥98B.

• Annual dividend forecast maintained at ¥175 per share, payout ratio target 30–40%.

• Global demand for hydraulic excavators revised downward to 206,000 units (-7% y-o-y); mining machinery demand expected to remain firm for large equipment.

• Revenue in Africa and Oceania expected to increase, offsetting declines in Europe and Asia.

• Value chain revenue from used equipment and rental is expected to decrease versus previous forecasts.