13 - 04 - 2018 MyTractor

Komatsu sales growth will decrease as minor purchases of equipment by mining companies

Japanese machinery manufacturer Komatsu Ltd expects mining revenue growth to slow as demand for equipment maintenance slows, as miners are refraining from major new investments, a company executive said. Mining companies were forced to stop investing due to a collapse in commodity prices in 2015-2016. But since then, a partial recovery in prices has eased the pressure. Accumulated demand for parts and services helped Komatsu's mining revenues rise about 15% year-on-year in the fourth quarter of 2017, said Doug Blom, Komatsu's marketing director. "There was an accelerated recovery of the services business (...) it is probably not sustainable," said the executive. "The cycle of new equipment is the piece that I believe will be under strict discipline on the part of the mining companies," Blom added. "They will make sure they get the most out of their current machines before they go in and buy replacement or expansion equipment," he added. "Spendings on new equipment was expanding, but slowly", Blom said, which will boost Komatsu's revenue growth. "It will still be a positive growth, but at a slower pace since the recovery cycle will be behind us," he said.

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