For the six months ended June 30, 2022, revenue of Kubota Corporation and its subsidiaries increased by $1.2 billion (+14.4%) from the same period in the prior year to $9.5 billion
Domestic revenue decreased by $26 million (–1.1%) from the same period in the prior year to $2.3 billion because of decreased revenue in Farm & Industrial Machinery, despite increased revenue in Water & Environment.
Overseas revenue increased by $1.2 billion (+20.3%) from the same period in the prior year to $7.2 billion because of increased revenue in Farm & Industrial Machinery and Water & Environment.
Operating profit decreased by $200 million (–18%) from the same period in the prior year to $910 million mainly due to some negative effects from a rise in material prices and logistics expenses, despite some positive effects from sales price increase and favorable impact of foreign exchange rates. Profit before income taxes decreased by $130 million (–11.9%) from the same period in the prior year to $990 million due to decreased operating profit. Income tax expenses were $230 million. Profit for the period decreased by $84 million (–9.9%) from the same period in the prior year to $770 million.
Farm & Industrial Machinery
Revenue in this segment increased by 16.5% from the same period in the prior year to $8.3 billion and accounted for 87% of consolidated revenue.
Domestic revenue decreased by 3% from the same period in the prior year to $1.2 billion. Sales of agricultural-related products decreased due to a decline in rice price and termination of subsidies for business continuation of farmers.
Overseas revenue increased by 20.5% from the same period in the prior year to $7.1 billion. In North America, shipment of tractors made progress to resolve back orders and replenish dealer inventories, and sales of construction machinery were solid due to demand for infrastructure construction. In Europe, sales mainly of construction machinery and engines increased due to the stable market. In Asia outside Japan, sales of farm equipment, mainly tractors, in Thailand increased due to progress in developing dryland farming, while sales of farm equipment for rice farming were slow due to stagnated rice price. In China, sales of construction machinery and rice transplanters decreased by missing sales opportunities due to lockdown. Sales in India increased due to consolidation of Escorts Limited (currently, Escorts Kubota Limited; hereinafter, “EKL”).
Operating profit in this segment decreased by 18.5% from the same period in the prior year to $880 million due to some negative effects from a rise in material prices and logistics expenses, while there were some positive effects from sales price increase and favorable impact of foreign exchange rates.
Forecasts
The Company revised its forecasts for revenue for the year ending Dec. 31, 2022 upward to $19.9 billion, an increase of $1.4 billion from the previous forecasts, which were announced on Feb. 14, 2022. This revision was made because overseas revenue is expected to increase in consideration of the current trend of exchange rate fluctuations, consolidation of EKL, and an increase in sales of farm equipment in Thailand.
Operating profit was revised to $2 billion, an increase of $75 million from the previous forecasts considering the revised revenue forecast and current trend of exchange rate fluctuations and inflation. Profit before income taxes was revised to $2.1 billion, an increase of $150 million from the previous forecasts and profit attributable to owners of the parent was revised to $1.4 billion, an increase of $53 million from the previous forecasts.
