Kito results for 2020 show steady recovery
In the last quarter of Kito’s financial year which ended March 2021 the company has reported that demand has recovered to the same level as the previous year despite Covid infection rates increasing. Effort was focused on profit and cash generation with cost controlled across board. Sales in Q4 were up 1.6% on 2020 and net income fell by 4% on the same period last year.
The acquisition of Van Leusden of the Netherlands was consolidated in Q4 of the 2020 financial year (FY) and goodwill impairment and restructuring cost from overseas subsidiaries are all recorded in Q4
Kito recorded that demand showed a gentle recovery trend after Q2-FY2020 but for the full year sales were down 11.8% to 51,805 million JPY on FY2019 and net income was down 26.8% to 2344 million JPY.
In Japan a gentle recovery trend started mid-Q1 with orders related to major equipment investment strong and signs of recovery in merchandise traffic related to infrastructure
In the Americas the US business is composed of two pillars: hoist and crane business and the sales and manufacture of chain accessories, which was added after the acquisition of Peerless. Despite the spread of Covid, chain operation leads a recovery trend. The recovery trend strengthened in Q4, but Kito says it must continue to monitor for possible impact due to marine transportation delay
Kito’s Chinese business also has two strands: production and sales of wire-rope hoists for the domestic market and sales of Japanese high functioning products There was a substantial impact from the pandemic at the beginning of the fiscal year, but demand recovered quickly, ahead of the rest of the world.
The crane business in Thailand and South Korea is the mainstay of Kito’s Asia segment where profitability is improving by strengthening hoist sales and maintenance services for cranes. Orders for LCD-related products in South Korea have recovered but investment is slow in equipment for automotive and other industries in Southeast Asia.
In Europe three subsidiaries consolidated in FY2018 to FY2020, helping differentiate Kito from competitors by expanding product lines. Despite the difficult business environment, Kito products are steadily penetrating the market and orders remain robust
For the next financial year Kito forcasts a clearer division between performing and struggling industries. Despite the remaining impact of the pandemic, business will start on the path to recovery. Kito will need to respond to changes in environmental policy and disruptions in marine transportation. The company intends to enhance sales by assigning personnel dedicated to large projects and equipment investment will continue to drive towards higher production efficiency.