For the year ended Dec. 31, 2020, revenue of Kubota Corporation and its subsidiaries decreased by $630 million or 3.5% from the prior year to $17.6 billion. 

Domestic revenue decreased by $290 million or 4.8% from the prior year to $5.7 billion because revenue in Farm & Industrial Machinery decreased mainly due to some negative impacts of the infection spread of COVID-19 and the consumption tax hike in the fiscal 2019. In addition, revenue in Water & Environment decreased due to a decrease in sales of environment-related products and products for private sector, such as plastic pipes.

Overseas revenue decreased by $350 million or 2.8% from the prior year to $11.9 billion because of significantly decreased revenue in Farm & Industrial Machinery mainly due to delay in production and shipment, while demand caused by stay-at-home lifestyle increased along with the infection spread of COVID-19. In addition, revenue in Water & Environment decreased slightly. As a result, overseas revenue accounted for 67.9% of consolidated revenue, which increased by 0.5 percentage points from the prior year.

Operating profit decreased by $250 million or 13.1% from the prior year to $1.7 billion. This decrease was mainly due to some negative effects from decreased revenue in the domestic and overseas markets, as well as a deterioration in profitability in its manufacturing bases resulting from a temporary suspension of production and a reduction in production volume, although there were some positive effects from raised product prices and declined interest rates in the United States.

Farm & Industrial Machinery

Farm & Industrial Machinery is comprised of farm equipment, agricultural-related products, engines, and construction machinery. Revenue in this segment decreased by 3.2% from the prior year to $14.3 billion, and accounted for 81.4% of consolidated revenue.

Domestic revenue decreased by 4.4% from the prior year to $2.8 billion. Sales of farm equipment decreased significantly mainly due to adverse reaction from rushed demand before the consumption tax hike and voluntary restraint of sales activities along with the infection spread of COVID-19.

Overseas revenue decreased by 2.9% from the prior year to $11.5 billion. In North America, retail sales from dealers to end customers were extremely strong mainly due to solid demand after April and a positive effect from introduction of new models. However, wholesales of construction machinery and tractors decreased due to carryover of wholesales to the fiscal 2021 resulting from delay in production along with the infection spread of COVID-19. As a result, dealer inventory level significantly declined. In addition, sales of engines also decreased significantly mainly due to a negative impact of inventory adjustments by OEM clients.

In Europe, sales of engines, construction machinery and tractors decreased mainly due to some negative effects from temporarily suspended business by dealers and a reduction in production of OEM clients for engines along with the infection spread of COVID-19. In Asia outside Japan, wholesales of tractors in Thailand decreased due to a negative impact of inventory adjustments, while retail sales increased slightly due to a recovery in the second half of the year caused by favorable rainfall in the rainy season. On the other hand, sales of engines and farm equipment in China increased due to recovered demand after resumption of economic activities. In addition, sales of farm equipment in India increased as well. As a result, revenue in Asia outside Japan increased from the prior year.

Operating profit in this segment decreased by 11.5% from the prior year to $1.7 billion mainly due to a deterioration in profitability in its manufacturing bases, decreased revenue in the domestic and overseas markets, and a negative effect from the yen appreciation, although there were some positive effects such as raised product prices and declined interest rates in the United States.

Forecasts

Kubota issued the following forecasts of operations for its 2021 financial year:

  • Revenue increase of 10.6% to $19.5 billion
  • Operating revenue increase of 25.5% to $2.1 billion
  • Profit before income taxes increase of 21% to $2.1 billion