Komatsu has revised the projections for consolidated and non-consolidated business results as well as cash dividend for the fiscal year ending March 31, 2018(April 1, 2017 - March 31, 2018), which the Company announced on April 27, 2017.
Reasons for the Revision
[Projection for Consolidated Business Results]
In the first six-month period of FY2017, sales of construction equipment in Strategic Markets, such as China and Indonesia, as well as sales of mining equipment surpassed the projections. In addition, the Japanese yen depreciated more than anticipated, and Komatsu secured a gain from the sale of investment securities. As a result, sales outperformed the initial projection for the period under review. In the second six-month period of FY2017, Komatsu anticipates that demand for construction and mining equipment will remain firm in a multiple number of regions. Accordingly, Komatsu projects that actual business results for FY2017 will outperform its initial projections. Komatsu has also reassessed the projected foreign exchange rates, which are preconditions for the projection of full-year results. Specifically, Komatsu changed the average exchange rates in the second six-month period of FY2017 to EUR1=JPY123 and RMB1=JPY15.5. As a result, Komatsu is revising consolidated sales and profits of the full-year projections of April 27, 2017 for FY2017 (April 1, 2017 - March 31, 2018).
Komatsu estimates the average exchange rates for the full year as follows: USD1=JPY108.0, EUR1=JPY124.4 and RMB1=JPY16.0. (Initial assumption: USD1=JPY105, EUR1=JPY115 and RMB1=JPY15.0)
[Projection for Non-consolidated Business Results]
Similar to the revision of consolidated business results, Komatsu is revising non-consolidated sales and profits of the full-year projections for FY2017 (April 1, 2017 - March 31, 2018), announced on April 27 this year, as sales of construction equipment in Strategic Markets, such as China and Indonesia, and those of mining equipment outperformed its projections for the first six-month period under review, demand for construction and mining equipment should remain firm in a multiple number of regions, and Komatsu has also reassessed the projected foreign exchange rates, which are preconditions for the projection of full-year results.
Reasons for the Revision
The Company is building a sound financial position as well as flexible and agile corporate strengths to increase its corporate value. Concerning cash dividends to shareholders, the Company maintains the policy of redistributing profits by considering consolidated business results and continuing stable dividends. Specifically, the Company sets the goal of a consolidated payout ratio of 40% or higher and no decrease of dividends, as long as the consolidated payout ratio does not surpass 60%.
Concerning the interim cash dividend under this basic policy, the Company is planning to increase it by JPY7 from the projection of April 27, 2017 to JPY36 per share, after reviewing business results for the first six-month period of FY2017 and considering future business prospects. With respect to the year-end cash dividend, the Company is also revising the projection and planning to increase by JPY7 to JPY36. As a result, the Company plans to pay annual cash dividends of JPY72 per share, an increase of JPY14 from the previous fiscal year ended March 31, 2017.
