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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Kubota Corporation    6326   JP3266400005

KUBOTA CORPORATION

(6326)
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Kubota : RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30 2020 (IFRS)

08/04/2020 | 02:06am EST

FOR IMMEDIATE RELEASE

August 4, 2020

Contact: IR Group

Corporate Planning and Control Dept.

2‐47, Shikitsuhigashi 1‐chome,

Naniwa‐ku, Osaka 556‐8601, Japan

Phone: +81‐6‐6648‐2645

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2020 [IFRS]

Kubota Corporation hereby reports its consolidated results for the six months ended June 30, 2020.

Consolidated Financial Highlights

1. Consolidated results of operations for the six months ended June 30, 2020

(1) Results of operations

(Unit: millions of yen, except earnings per share)

Six months ended

Change

Six months ended

Change

June 30, 2020

[%]

June 30, 2019

[%]

Revenue

¥ 884,170

(8.9)

¥ 970,829

7.1

Operating profit

¥ 81,670

(26.4)

¥ 110,947

9.7

Profit before income taxes

¥ 84,421

(26.4)

¥ 114,640

9.0

Profit for the period

¥ 65,161

(24.9)

¥ 86,737

11.1

Profit attributable to owners of the parent

¥ 59,570

(26.6)

¥ 81,189

12.9

Comprehensive income for the period

¥ 30,848

(60.1)

¥ 77,332

99.2

Earnings per share attributable to owners of the parent:

Basic

¥ 48.87

¥ 65.95

Diluted

(2) Financial condition

(Unit: millions of yen)

June 30, 2020

Dec. 31, 2019

Total assets

¥ 3,127,889

¥ 3,139,318

Total equity

¥ 1,535,183

¥ 1,537,214

Equity attributable to owners of the parent

¥ 1,441,503

¥ 1,442,837

Ratio of equity attributable to owners of the parent

to total assets

46.1%

46.0%

Note:

Change [%] represents the percentage change from the same period in the prior year.

2. Cash dividends

(Unit: yen)

Cash dividends per common share

Interim

Year‐end

Total

Year ending Dec. 31, 2020

¥ 17.00

Undecided

Undecided

Year ended Dec. 31, 2019

¥ 17.00

¥ 19.00

¥ 36.00

Note:

Although Kubota Corporation's basic policy for the return of profit to shareholders is to maintain stable dividends and raise dividends, the specific amount of cash dividends for each fiscal year is decided in consideration of the development of business performance, financial condition, and shareholder return ratio calculated from dividends and share buybacks. The specific amount of cash dividends for the year ending December 31, 2020 has not been decided at this time and Kubota Corporation will publicize the amount as soon as a decision is made.

‐1‐

3. Forecasts of operations for the year ending December 31, 2020

(Unit: millions of yen, except earnings per share)

Year ending

Change

Dec. 31, 2020

[%]

Revenue

¥ 1,780,000

( 7.3)

Operating profit

¥ 150,000

( 25.6)

Profit before income taxes

¥ 155,000

( 25.8)

Profit attributable to owners of the parent

¥ 110,000

( 26.2)

Earnings per share attributable to owners of the parent ‐ Basic

¥ 90.38

Notes:

  1. Change [%] represents the percentage change from the same period in the prior year.
  2. Please refer to the accompanying materials, "1. Review of operations and financial condition (3) Forecasts for the year ending December 31, 2020" on page 6 for further information related to the forecasts of operations.

4. Other information

  1. Changes in significant subsidiaries during the six months ended June 30, 2020 (changes in specified subsidiaries resulting in the changes in scope of consolidation): None
  2. Changes in accounting policies and changes in accounting estimates
    1. Changes in accounting policies required by IFRS: None
    2. Changes in accounting policies due to reasons other than a) above: None
    3. Changes in accounting estimates: None
  3. Number of common shares issued

a) Number of common shares issued including treasury shares as of June 30, 2020

:

1,220,576,846

Number of common shares issued including treasury shares as of December 31, 2019

:

1,220,576,846

b)

Number of treasury shares as of June 30, 2020

:

5,142,876

Number of treasury shares as of December 31, 2019

:

648,716

c)

Weighted‐average number of common shares outstanding during the six months ended June 30, 2020

:

1,218,840,330

Weighted‐average number of common shares outstanding during the six months ended June 30, 2019

:

1,230,946,842

(Information on the status of the quarterly review by the independent auditor) This release is not subject to the quarterly review by the independent auditor.

(Method of obtaining supplementary materials on the financial results)

Kubota Corporation plans to hold a result briefing (conference call) for institutional investors and securities analysts on August 7, 2020. The supplementary material will be published on the Company's website on the same day.

< Cautionary statements with respect to forward‐looking statements >

This document may contain forward‐looking statements that are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results may differ materially from what is forecast in forward‐looking statements due to a variety of factors, including, without limitation: general economic conditions in the Company's markets, particularly government agricultural policies, levels of capital expenditures both in public and private sectors, foreign currency exchange rates, the occurrence of natural disasters, continued competitive pricing pressures in the marketplace, as well as the Company's ability to continue to gain acceptance of its products.

‐2‐

Index to accompanying materials

1. Review of operations and financial condition …………………………………………………………………………………………

4

(1)

Summary of the results of operations for the six‐month period ………………………………………………………

4

(2)

Financial condition ……………………………………………………………………………………………………………………......

5

(3)

Forecasts for the year ending December 31, 2020 …………………………………………………………………………

6

2. Other information ……………………………………………………………………………………………………………………............... 6

(1)

Changes in significant subsidiaries ……………………………………………………………………………………………………

6

(2)

Changes in accounting policies …………………………………………………………………………………………………………

6

3. Condensed consolidated financial statements …………………………………………………………………………………………

7

(1)

Condensed consolidated statement of financial position …………………………………………………………………

7

(2)

Condensed consolidated statement of profit or loss ………………………………………………………………………

9

(3)

Condensed consolidated statement of comprehensive income ………………………………………………………

10

(4)

Condensed consolidated statement of changes in equity ………………………………………………………………

11

(5)

Condensed consolidated statement of cash flows ……………………………………………………………………………

12

(6)

Notes to the going concern assumption …………………………………………………………………………………………

12

(7)

Consolidated segment information …………………………………………………………………………………………………

13

(8)

Consolidated revenue by product group …………………………………………………………………………………………

14

(9)

Anticipated consolidated revenue by reportable segment ………………………………………………………………

15

4. Results of operations for the three months ended June 30, 2020 ……………………………………………………………

16

(1)

Condensed consolidated statement of profit or loss ………………………………………………………………………

16

(2)

Consolidated segment information …………………………………………………………………………………………………

17

(3)

Consolidated revenue by product group …………………………………………………………………………………………

18

‐3‐

Kubota Corporation

and Its Subsidiaries

1. Review of operations and financial condition

(1) Summary of the results of operations for the six-month period

For the six months ended June 30, 2020, revenue of Kubota Corporation and its subsidiaries (hereinafter, the "Company") decreased by ¥86.7 billion [8.9%] from the same period in the prior year to ¥884.2 billion.

Domestic revenue decreased by ¥19.9 billion [6.4%] from the same period in the prior year to ¥290.2 billion because of decreased revenue in Farm & Industrial Machinery, Water & Environment, and Other.

Overseas revenue decreased by ¥66.8 billion [10.1%] from the same period in the prior year to ¥594.0 billion because of significantly decreased sales of construction machinery, tractors, and engines. On the other hand, revenue in Water & Environment increased.

Operating profit decreased by ¥29.3 billion [26.4%] from the same period in the prior year to ¥81.7 billion because profitability of products, which were shipped in this fiscal year, in its manufacturing bases deteriorated due to a significant reduction in production in the fourth quarter of 2019. In addition, there were some negative effects from significantly decreased sales in the overseas markets and unfavorable foreign exchange rates. Profit before income taxes decreased by ¥30.2 billion [26.4%] from the same period in the prior year to ¥84.4 billion mainly due to decreased operating profit. Income tax expenses were ¥20.6 billion. Share of profits of investments accounted for using the equity method was ¥1.3 billion. Profit for the period decreased by ¥21.6 billion [24.9%] from the same period in the prior year to ¥65.2 billion. Profit attributable to owners of the parent decreased by ¥21.6 billion [26.6%] from the same period in the prior year to ¥59.6 billion.

Revenue from external customers and operating profit by each reportable segment was as follows:

1) Farm & Industrial Machinery

Farm & Industrial Machinery is comprised of farm equipment, agricultural‐related products, engines, and construction machinery.

Revenue in this segment decreased by 10.2% from the same period in the prior year to ¥719.0 billion, and accounted for 81.3% of consolidated revenue.

Domestic revenue decreased by 9.1% from the same period in the prior year to ¥144.6 billion. Sales of farm equipment and agricultural‐related products decreased mainly due to adverse reaction from rushed demand before the consumption tax hike and a negative effect from voluntary restraint of sales activities along with the infection spread of COVID‐19.

Overseas revenue decreased by 10.5% from the same period in the prior year to ¥574.4 billion. In North America, retail sales had been strong mainly due to solid demand since April and a positive effect from introduction of new models. However, wholesales of construction machinery and tractors decreased because of adverse reaction from carryover of shipment of some products from the fiscal 2018 to the fiscal 2019 caused by typhoon, which had occurred in 2018, and delay in production and shipment caused by suspended operations in its manufacturing bases resulting from the infection spread of COVID‐19. In addition, sales of engines also significantly decreased from the same period in the prior year mainly due to a reduction in production of OEM clients resulting from the infection spread of COVID‐19 and a deterioration in oil and gas market. In Europe, sales of construction machinery, tractors, and engines significantly decreased mainly due to some negative effects from business suspension by dealers and a reduction in production of OEM clients for engines along with the infection spread of COVID‐19. In Asia outside Japan, sales of tractors in Thailand decreased due to a negative impact of water shortage, which had continued since the prior year and inventory adjustments by dealers. On the other hand, sales of engines in China increased due to recovered demand after

4

Kubota Corporation

and Its Subsidiaries

resumption of economic activities. In addition, sales of farm equipment increased due to a positive effect from introduction of a new model.

Operating profit in this segment decreased by 25.0% from the same period in the prior year to ¥87.1 billion mainly due to significantly decreased revenue in the domestic and overseas markets and a deterioration in profitability of products, which were shipped in this fiscal year, in its manufacturing bases, while there were some positive effects from raised product prices and declined material prices.

2) Water & Environment

Water & Environment is comprised of pipe‐ and infrastructure‐related products (ductile iron pipes, plastic pipes, valves for public sector, industrial castings, ceramics, spiral‐welded steel pipes, air‐conditioning equipment, and other products) and environment‐related products (environmental control plants, pumps, valves for private sector, and other products).

Revenue in this segment decreased by 2.5% from the same period in the prior year to ¥150.3 billion, and accounted for 17.0% of consolidated revenue.

Domestic revenue decreased by 3.3% from the same period in the prior year to ¥130.9 billion. Revenue in pipe‐ and infrastructure‐related products slightly decreased due to a decrease in sales of plastic pipes, air‐conditioning equipment and spiral‐welded steel pipes caused by the infection spread of COVID‐19. On the other hand, sales of some products, such as ductile iron pipes, increased. In environment‐related products, revenue from construction of waste disposal and treatment facility in Futaba Town, Fukushima Prefecture decreased mainly.

Overseas revenue increased by 3.3% from the same period in the prior year to ¥19.4 billion. Sales of industrial castings to Korea and membrane systems to China increased.

Operating profit in this segment decreased by 7.7% from the same period in the prior year to ¥9.9 billion due to decreased revenue in the domestic market and an increase in construction costs of plant.

3) Other

Other is mainly comprised of a variety of services.

Revenue in this segment decreased by 6.4% from the same period in the prior year to ¥14.8 billion, and accounted for 1.7% of consolidated revenue.

Operating profit in this segment decreased by 5.7% from the same period in the prior year to ¥1.5 billion.

(2) Financial condition

  1. Assets, liabilities, and equity

Total assets at June 30, 2020 were ¥3,127.9 billion, a decrease of ¥11.4 billion from the prior fiscal year‐end. With respect to assets, finance receivables increased due to the expansion in sales financing operations in North America, where retail sales were strong. In addition, cash and cash equivalents temporarily increased due to the acceleration of funding in preparation for the growing demand for funds caused by the infection spread of COVID‐19. On the other hand, trade receivables and inventories decreased mainly due to delay in production and shipment caused by suspended operations in its manufacturing bases resulting from the infection spread of COVID‐19. Furthermore, other financial assets also decreased due to sales of securities.

With respect to liabilities, trade payables significantly decreased while bonds and borrowings increased. Equity slightly decreased due to purchases of treasury shares and a deterioration in other components of equity along with fluctuations in foreign exchange rates and prices of securities despite the accumulation of retained earnings. The ratio of equity attributable to owners of the parent to total assets stood at 46.1%, 0.1 percent higher than the prior fiscal

5

Kubota Corporation

and Its Subsidiaries

year‐end.

  1. Cash flows

Net cash provided by operating activities during the six months ended June 30, 2020 was ¥49.5 billion, a decrease of ¥1.4 billion in net cash inflow compared with the same period in the prior year. The decrease was mainly due to an increase in cash outflow related to an increase in finance receivables and a decrease in profit for the period. On the other hand, cash outflow related to the changes in working capital decreased due to a decrease in trade receivables and inventories.

Net cash used in investing activities was ¥30.4 billion, a decrease of ¥34.2 billion in net cash outflow compared with the same period in the prior year. This decrease was mainly due to an increase in cash inflow related to sales of securities and a decrease in cash outflow related to acquisition of property, plant, and equipment and intangible assets.

Net cash provided by financing activities was ¥36.2 billion, an increase of ¥29.7 billion in net cash inflow compared with the same period in the prior year mainly due to an increase in funding.

As a result of the above, and after taking into account the effects from exchange rate changes, cash and cash equivalents at June 30, 2020 were ¥250.7 billion, an increase of ¥51.0 billion from the beginning of the current period.

(3) Forecasts for the year ending December 31, 2020

The Company did not announce the forecasts for the year ending December 31, 2020, as it was difficult to calculate the reasonable forecasts under the uncertain circumstances about the scale of the infection spread of COVID‐19 and the timing of end of COVID‐19. However, the Company has determined the forecasts as follows based on the information available at the present time and its business trends of the first half of this year because economic activities have been resumed gradually in the domestic and overseas markets.

Consolidated revenue for the year ending December 31, 2020 is forecast to decrease by ¥140.0 billion from the prior year to ¥1,780.0 billion. The Company expects the infection spread of COVID‐19 will settle gradually. However, the negative impact of COVID‐19 is expected to continue throughout the year because the pace of a recovery in demand after the resumption of economic activities is expected to be slow and it is expected to take time for a recovery in production, including parts procurement. As a result, the negative impact on consolidated revenue is expected to be a decrease of around ¥158.0 billion.

Operating profit is forecast to decrease by ¥51.7 billion from the prior year to ¥150.0 billion mainly due to a negative impact of the yen appreciation and a deterioration in profitability of products in manufacturing bases along with reduced production volumes, in addition to significantly decreased revenue in the domestic and overseas markets. Profit before income taxes is forecast to decrease by ¥54.0 billion from the prior year to ¥155.0 billion. Profit attributable to owners of the parent is forecast to decrease by ¥39.1 billion from the prior year to ¥110.0 billion.

(These forecasts are based on the assumption of exchange rates of ¥107=US$1 and ¥120=€1.)

2. Other information

(1) Changes in significant subsidiaries

None

(2) Changes in accounting policies

None

6

Kubota Corporation

and Its Subsidiaries

3. Condensed consolidated financial statements

(1) Condensed consolidated statement of financial position

ASSETS

(Unit: millions of yen)

June 30, 2020

Dec. 31, 2019

Change

Amount

%

Amount

%

Amount

Current assets:

Cash and cash equivalents

¥

250,659

¥

199,665

¥

50,994

Trade receivables

656,793

682,596

(25,803)

Finance receivables

308,291

293,933

14,358

Other financial assets

87,075

71,968

15,107

Inventories

368,737

382,401

(13,664)

Income taxes receivable

4,985

6,287

(1,302)

Other current assets

51,885

82,034

(30,149)

Total current assets

1,728,425

55.3

1,718,884

54.8

9,541

Noncurrent assets:

Investments accounted for using

34,573

33,729

844

the equity method

Finance receivables

721,561

699,238

22,323

Other financial assets

116,229

148,936

(32,707)

Property, plant, and equipment

392,976

405,349

(12,373)

Goodwill and intangible assets

64,795

60,986

3,809

Deferred tax assets

45,027

46,984

(1,957)

Other noncurrent assets

24,303

25,212

(909)

Total noncurrent assets

1,399,464

44.7

1,420,434

45.2

(20,970)

Total assets

¥

3,127,889

100.0

¥

3,139,318

100.0

¥

(11,429)

‐7‐

Kubota Corporation

and Its Subsidiaries

LIABILITIES AND EQUITY

(Unit: millions of yen)

June 30, 2020

Dec. 31, 2019

Change

Amount

%

Amount

%

Amount

Current liabilities:

Bonds and borrowings

¥

364,585

¥

386,538

¥

(21,953)

Trade payables

244,678

293,774

(49,096)

Other financial liabilities

72,910

78,860

(5,950)

Income taxes payable

22,162

18,611

3,551

Provisions

34,445

31,001

3,444

Other current liabilities

196,773

192,959

3,814

Total current liabilities

935,553

29.9

1,001,743

31.9

(66,190)

Noncurrent liabilities:

Bonds and borrowings

592,535

516,443

76,092

Other financial liabilities

25,149

30,247

(5,098)

Retirement benefit liabilities

15,443

15,773

(330)

Deferred tax liabilities

19,039

32,984

(13,945)

Other noncurrent liabilities

4,987

4,914

73

Total noncurrent liabilities

657,153

21.0

600,361

19.1

56,792

Total liabilities

1,592,706

50.9

1,602,104

51.0

(9,398)

Equity:

Share capital

84,130

84,130

Share premium

84,993

84,671

322

Retained earnings

1,293,047

1,238,824

54,223

Other components of equity

(13,178)

35,849

(49,027)

Treasury shares

(7,489)

(637)

(6,852)

Total equity attributable to owners of the parent

1,441,503

46.1

1,442,837

46.0

(1,334)

Noncontrolling interests

93,680

3.0

94,377

3.0

(697)

Total equity

1,535,183

49.1

1,537,214

49.0

(2,031)

Total liabilities and equity

¥

3,127,889

100.0

¥

3,139,318

100.0

¥

(11,429)

‐8‐

Kubota Corporation

and Its Subsidiaries

(2) Condensed consolidated statement of profit or loss

(Unit: millions of yen, except earnings per share)

Six months ended

Six months ended

Change

June 30, 2020

June 30, 2019

Amount

%

Amount

%

Amount

%

Revenue

¥

884,170

100.0

¥

970,829

100.0

¥

(86,659)

(8.9)

Cost of sales

(634,113)

(689,649)

55,536

Selling, general, and administrative expenses

(166,357)

(166,637)

280

Other income

4,356

1,326

3,030

Other expenses

(6,386)

(4,922)

(1,464)

Operating profit

81,670

9.2

110,947

11.4

(29,277)

(26.4)

Finance income

3,914

4,444

(530)

Finance costs

(1,163)

(751)

(412)

Profit before income taxes

84,421

9.5

114,640

11.8

(30,219)

(26.4)

Income tax expenses

(20,598)

(29,476)

8,878

Share of profits of investments accounted for

1,338

1,573

(235)

using the equity method

Profit for the period

¥

65,161

7.4

¥

86,737

8.9

¥

(21,576)

(24.9)

Profit attributable to:

Owners of the parent

¥

59,570

6.7

¥

81,189

8.4

¥

(21,619)

(26.6)

Noncontrolling interests

5,591

0.7

5,548

0.5

43

0.8

Earnings per share attributable to owners of the parent:

Basic

¥

48.87

¥

65.95

Diluted

‐9‐

Kubota Corporation

and Its Subsidiaries

(3) Condensed consolidated statement of comprehensive income

(Unit: millions of yen)

Six months ended

Six months ended

Change

June 30, 2020

June 30, 2019

Profit for the period

¥

65,161

¥

86,737

¥

(21,576)

Other comprehensive income, net of income tax:

Items that will not be reclassified subsequently to profit or loss:

Remeasurement of defined benefit

113

30

83

pension plans

Net change in fair value of financial assets measured at

(7,887)

5,275

(13,162)

fair value through other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Exchange rate differences on translating

(26,539)

(14,710)

(11,829)

foreign operations

Total other comprehensive income, net of income tax

(34,313)

(9,405)

(24,908)

Comprehensive income for the period

¥

30,848

¥

77,332

¥

(46,484)

Comprehensive income attributable to:

Owners of the parent

¥

28,401

¥

70,513

¥

(42,112)

Noncontrolling interests

2,447

6,819

(4,372)

‐10‐

Kubota Corporation

and Its Subsidiaries

(4) Condensed consolidated statement of changes in equity

Six months ended June 30, 2020

(Unit: millions of yen)

Equity attributable to owners of the parent

Share

Share

Retained

Other

Treasury

Total equity

Noncontrolling

Total

components

attributable to

capital

premium

earnings

of

shares

owners of the

interests

equity

equity

parent

Balance as of Jan. 1, 2020

¥

84,130

¥

84,671

¥

1,238,824

¥

35,849

¥

(637)

¥

1,442,837

¥

94,377

¥

1,537,214

Profit for the period

59,570

59,570

5,591

65,161

Total other comprehensive

(31,169)

(31,169)

(3,144)

(34,313)

income, net of income tax

Comprehensive income

59,570

(31,169)

28,401

2,447

30,848

for the period

Transfer to retained

17,873

(17,873)

earnings

Dividends paid

(23,185)

(23,185)

(2,721)

(25,906)

Purchases and sales of treasury

(7,000)

(7,000)

(7,000)

shares

Share‐based payments with

(61)

(35)

148

52

52

transfer restrictions

Changes in ownership

383

15

398

(423)

(25)

interests in subsidiaries

Balance as of June 30, 2020

¥

84,130

¥

84,993

¥

1,293,047

¥

(13,178)

¥

(7,489)

¥

1,441,503

¥

93,680

¥

1,535,183

Six months ended June 30, 2019

(Unit: millions of yen)

Equity attributable to owners of the parent

Share

Share

Retained

Other

Treasury

Total equity

Noncontrolling

Total

components

attributable to

capital

premium

earnings

of

shares

owners of the

interests

equity

equity

parent

Balance as of Jan. 1, 2019

¥

84,130

¥

85,305

¥

1,135,395

¥

35,343

¥

(323)

¥

1,339,850

¥

86,583

¥

1,426,433

Profit for the period

81,189

81,189

5,548

86,737

Total other comprehensive

(10,676)

(10,676)

1,271

(9,405)

income, net of income tax

Comprehensive income

81,189

(10,676)

70,513

6,819

77,332

for the period

Transfer to retained

3,463

(3,463)

earnings

Dividends paid

(22,184)

(22,184)

(3,938)

(26,122)

Purchases and sales of treasury

(7,063)

(7,063)

(7,063)

shares

Share‐based payments with

(56)

(19)

122

47

47

transfer restrictions

Changes in ownership

(202)

(449)

(651)

(3,617)

(4,268)

interests in subsidiaries

Balance as of June 30, 2019

¥

84,130

¥

85,047

¥

1,197,844

¥

20,755

¥

(7,264)

¥

1,380,512

¥

85,847

¥

1,466,359

‐11‐

Kubota Corporation

and Its Subsidiaries

(5) Condensed consolidated statement of cash flows

(Unit: millions of yen)

Six months ended

Six months ended

Change

June 30, 2020

June 30, 2019

Cash flows from operating activities:

Profit for the period

¥

65,161

¥

86,737

Depreciation and amortization

33,099

30,581

Finance income and costs

(2,910)

(3,590)

Income tax expenses

20,598

29,476

Decrease (increase) in trade receivables

10,600

(37,635)

Increase in finance receivables

(63,460)

(34,059)

Decrease (increase) in inventories

6,300

(29,360)

Decrease (increase) in other assets

37,786

(3,315)

(Decrease) increase in trade payables

(46,317)

17,536

Increase in other liabilities

11,320

12,778

Other, net

(1,534)

(2,361)

Interest received

2,058

2,071

Dividends received

1,430

1,917

Interest paid

(419)

(563)

Income taxes paid, net

(24,191)

(19,340)

Net cash provided by operating activities

49,521

50,873

¥

(1,352)

Cash flows from investing activities:

Payments for acquisition of property, plant, and equipment

(38,434)

(51,722)

and intangible assets

Proceeds from sales and redemptions of securities

26,916

5,321

Net decrease in short‐term loans receivable from associate

250

150

Net increase in time deposits

(25,373)

(8,513)

Net decrease (increase) in short‐term investments

2,894

(7,646)

Other, net

3,330

(2,188)

Net cash used in investing activities

(30,417)

(64,598)

34,181

Cash flows from financing activities:

Funding from bonds and long‐term borrowings

204,676

172,621

Redemptions of bonds and repayments of long‐term borrowings

(93,171)

(98,498)

Net decrease in short‐term borrowings

(38,197)

(22,333)

Repayments of lease liabilities

(7,272)

(9,733)

Dividends paid

(23,185)

(22,184)

Purchases of treasury shares

(7,000)

(7,063)

Proceeds from acquisition of noncontrolling interests

(24)

(5,652)

Other, net

366

(655)

Net cash provided by financing activities

36,193

6,503

29,690

Effect of exchange rate changes on cash and cash equivalents

(4,303)

(1,142)

(3,161)

Net increase (decrease) in cash and cash equivalents

50,994

(8,364)

Cash and cash equivalents, at the beginning of the period

199,665

229,123

Cash and cash equivalents, at the end of the period

¥

250,659

¥

220,759

¥

29,900

(6) Notes to the going concern assumption

None

‐12‐

Kubota Corporation

and Its Subsidiaries

  1. Consolidated segment information
  1. Reportable segments

Information by reportable segment is summarized as follows:

(Unit: millions of yen)

Farm &

Water &

Industrial

Other

Adjustments

Consolidated

Environment

Six months ended June 30, 2020

Machinery

Revenue

External customers

¥

718,996

¥

150,326

¥

14,848

¥

¥

884,170

Intersegment

137

535

13,240

(13,912)

Total

719,133

150,861

28,088

(13,912)

884,170

Operating profit

¥

87,149

¥

9,904

¥

1,530

¥

(16,913)

¥

81,670

(Unit: millions of yen)

Farm &

Water &

Industrial

Other

Adjustments

Consolidated

Environment

Six months ended June 30, 2019

Machinery

Revenue

External customers

¥

800,822

¥

154,138

¥

15,869

¥

¥

970,829

Intersegment

121

537

14,032

(14,690)

Total

800,943

154,675

29,901

(14,690)

970,829

Operating profit

¥

116,245

¥

10,733

¥

1,623

¥

(17,654)

¥

110,947

Notes:

    1. Adjustments include items such as the elimination of intersegment transfers and corporate expenses which are not allocated to any particular reportable segment. The corporate expenses included in Adjustments consist mainly of administration department expenses, basic research expenses, and foreign exchange gains or losses incurred by Kubota Corporation.
    2. The aggregated amounts of operating profit are equal to those presented in the condensed consolidated statement of profit or loss. Please refer to the condensed consolidated statement of profit or loss for the reconciliation of operating profit to profit before income taxes.
    3. Intersegment transfers are recorded at values that approximate market prices.
    4. Beginning with the current consolidated fiscal year, in conformity with the change in the business reporting structure of the Company, the amounts related to "Air‐conditioning equipment" are reported in the "Water & Environment" segment, whereas they were formerly reported in the "Farm & Industrial Machinery" segment. The information for the same period in the prior year has been retrospectively adjusted to conform to the current fiscal year's presentation.
  1. Geographic information

Information about revenue from external customers by location is summarized as follows:

(Unit: millions of yen)

Six months ended

Six months ended

June 30, 2020

June 30, 2019

Japan

¥

290,193

¥

310,102

North America

300,361

338,283

Europe

108,788

132,379

Asia outside Japan

161,160

166,842

Other areas

23,668

23,223

Total

¥

884,170

¥

970,829

Notes:

  1. Revenue from North America included that from the United States of ¥270,045 million and ¥300,073 million for the six months ended June 30, 2020 and 2019, respectively.
  2. There was no single customer from whom revenue exceeded 10% or more of total consolidated revenue of the Company.

‐13‐

Kubota Corporation

and Its Subsidiaries

(8) Consolidated revenue by product group

(Unit: millions of yen)

Six months ended

Six months ended

Change

June 30, 2020

June 30, 2019

Amount

%

Amount

%

Amount

%

Farm Equipment and Engines

¥

583,805

66.0

¥

637,736

65.7

¥

(53,931)

(8.5)

Domestic

129,099

142,604

(13,505)

(9.5)

Overseas

454,706

495,132

(40,426)

(8.2)

Construction Machinery

135,191

15.3

163,086

16.8

(27,895)

(17.1)

Domestic

15,501

16,497

(996)

(6.0)

Overseas

119,690

146,589

(26,899)

(18.3)

Farm & Industrial Machinery

718,996

81.3

800,822

82.5

(81,826)

(10.2)

Domestic

144,600

16.3

159,101

16.4

(14,501)

(9.1)

Overseas

574,396

65.0

641,721

66.1

(67,325)

(10.5)

Pipe‐ and Infrastructure‐related Products

90,325

10.2

89,930

9.3

395

0.4

Domestic

75,393

75,647

(254)

(0.3)

Overseas

14,932

14,283

649

4.5

Environment‐related Products

60,001

6.8

64,208

6.6

(4,207)

(6.6)

Domestic

55,519

59,698

(4,179)

(7.0)

Overseas

4,482

4,510

(28)

(0.6)

Water & Environment

150,326

17.0

154,138

15.9

(3,812)

(2.5)

Domestic

130,912

14.8

135,345

13.9

(4,433)

(3.3)

Overseas

19,414

2.2

18,793

2.0

621

3.3

Other

14,848

1.7

15,869

1.6

(1,021)

(6.4)

Domestic

14,681

1.7

15,656

1.6

(975)

(6.2)

Overseas

167

0.0

213

0.0

(46)

(21.6)

Total

¥

884,170

100.0

¥

970,829

100.0

¥

(86,659)

(8.9)

Domestic

290,193

32.8

310,102

31.9

(19,909)

(6.4)

Overseas

593,977

67.2

660,727

68.1

(66,750)

(10.1)

Note:

In conformity with the change in the business reporting structure of the Company, the amounts related to "Air‐conditioning equipment" are reported in the "Pipe‐ and Infrastructure‐related Products", whereas they were formerly reported in the "Farm Equipment and Engines", and the amounts related to "Pumps" and the amounts related to "Valves for private sector" are reported in the "Environment‐related Products", whereas they were formerly reported in the "Pipe‐ and Infrastructure‐related Products". The information for the same period in the prior year has been retrospectively adjusted to conform to the current fiscal year's presentation.

‐14‐

Kubota Corporation

and Its Subsidiaries

(9) Anticipated consolidated revenue by reportable segment

(Unit: billions of yen)

Year ending

Year ended

Change

Dec. 31, 2020

Dec. 31, 2019

Amount

%

Amount

%

Amount

%

Domestic

¥

280.0

¥

306.3

¥

(26.3)

(8.6)

Overseas

1,150.0

1,252.0

(102.0)

(8.1)

Farm & Industrial Machinery

1,430.0

80.3

1,558.3

81.1

(128.3)

(8.2)

Domestic

276.0

287.8

(11.8)

(4.1)

Overseas

44.0

42.3

1.7

4.1

Water & Environment

320.0

18.0

330.1

17.2

(10.1)

(3.0)

Domestic

29.5

31.2

(1.7)

(5.6)

Overseas

0.5

0.4

0.1

23.5

Other

30.0

1.7

31.6

1.7

(1.6)

(5.2)

Total

¥

1,780.0

100.0

¥

1,920.0

100.0

¥

(140.0)

(7.3)

Domestic

¥

585.5

32.9

¥

625.4

32.6

¥

(39.9)

(6.4)

Overseas

1,194.5

67.1

1,294.6

67.4

(100.1)

(7.7)

Note:

Beginning with the current consolidated fiscal year, in conformity with the change in the business reporting structure of the Company, the amounts related to "Air‐conditioning equipment" are reported in the "Water & Environment" segment, whereas they were formerly reported in the "Farm & Industrial Machinery" segment. The information for the same period in the prior year has been retrospectively adjusted to conform to the current fiscal year's presentation.

‐15‐

Kubota Corporation

and Its Subsidiaries

4. Results of operations for the three months ended June 30, 2020

(1) Condensed consolidated statement of profit or loss

(Unit: millions of yen, except earnings per share)

Three months ended

Three months ended

Change

June 30, 2020

June 30, 2019

Amount

%

Amount

%

Amount

%

Revenue

¥

444,627

100.0

¥

490,117

100.0

¥

(45,490)

(9.3)

Cost of sales

(312,295)

(347,623)

35,328

Selling, general, and administrative expenses

(78,289)

(81,523)

3,234

Other income

1,173

603

570

Other expenses

(4,004)

(3,508)

(496)

Operating profit

51,212

11.5

58,066

11.8

(6,854)

(11.8)

Finance income

2,719

2,805

(86)

Finance costs

(540)

(395)

(145)

Profit before income taxes

53,391

12.0

60,476

12.3

(7,085)

(11.7)

Income tax expenses

(12,509)

(15,176)

2,667

Share of profits of investments accounted for

1,051

1,003

48

using the equity method

Profit for the period

¥

41,933

9.4

¥

46,303

9.4

¥

(4,370)

(9.4)

Profit attributable to:

Owners of the parent

¥

38,814

8.7

¥

43,907

9.0

¥

(5,093)

(11.6)

Noncontrolling interests

3,119

0.7

2,396

0.4

723

30.2

Earnings per share attributable to owners of the parent:

Basic

¥

31.87

¥

35.70

Diluted

‐16‐

Kubota Corporation

and Its Subsidiaries

  1. Consolidated segment information
  1. Reportable segments

Information by reportable segment is summarized as follows:

(Unit: millions of yen)

Farm &

Water &

Industrial

Other

Adjustments

Consolidated

Environment

Three months ended June 30, 2020

Machinery

Revenue

External customers

¥

372,098

¥

65,474

¥

7,055

¥

¥

444,627

Intersegment

94

264

6,221

(6,579)

Total

372,192

65,738

13,276

(6,579)

444,627

Operating profit

¥

56,664

¥

1,606

¥

524

¥

(7,582)

¥

51,212

(Unit: millions of yen)

Farm &

Water &

Industrial

Other

Adjustments

Consolidated

Environment

Three months ended June 30, 2019

Machinery

Revenue

External customers

¥

414,247

¥

68,137

¥

7,733

¥

¥

490,117

Intersegment

30

241

7,154

(7,425)

Total

414,277

68,378

14,887

(7,425)

490,117

Operating profit

¥

64,786

¥

1,345

¥

548

¥

(8,613)

¥

58,066

Notes:

    1. Adjustments include items such as the elimination of intersegment transfers and corporate expenses which are not allocated to any particular reportable segment. The corporate expenses included in Adjustments consist mainly of administration department expenses, basic research expenses, and foreign exchange gains or losses incurred by Kubota Corporation.
    2. The aggregated amounts of operating profit are equal to those presented in the condensed consolidated statement of profit or loss. Please refer to the condensed consolidated statement of profit or loss for the reconciliation of operating profit to profit before income taxes.
    3. Intersegment transfers are recorded at values that approximate market prices.
    4. Beginning with the current consolidated fiscal year, in conformity with the change in the business reporting structure of the Company, the amounts related to "Air‐conditioning equipment" are reported in the "Water & Environment" segment, whereas they were formerly reported in the "Farm & Industrial Machinery" segment. The information for the same period in the prior year has been retrospectively adjusted to conform to the current fiscal year's presentation.
  1. Geographic information

Information about revenue from external customers by location is summarized as follows:

(Unit: millions of yen)

Three months ended

Three months ended

June 30, 2020

June 30,2019

Japan

¥

140,166

¥

154,155

North America

151,248

175,602

Europe

49,291

64,754

Asia outside Japan

91,035

84,884

Other areas

12,887

10,722

Total

¥

444,627

¥

490,117

Notes:

  1. Revenue from North America included that from the United States of 134,856 million and 156,738 million for the three months ended June 30, 2020 and 2019, respectively.
  2. There was no single customer from whom revenue exceeded 10% of total consolidated revenue of the Company.

‐17‐

Kubota Corporation

and Its Subsidiaries

(3) Consolidated revenue by product group

(Unit: millions of yen)

Three months ended

Three months ended

Change

June 30, 2020

June 30, 2019

Amount

%

Amount

%

Amount

%

Farm Equipment and Engines

¥

297,957

67.0

¥

330,987

67.5

¥

(33,030)

(10.0)

Domestic

70,854

79,203

(8,349)

(10.5)

Overseas

227,103

251,784

(24,681)

(9.8)

Construction Machinery

74,141

16.7

83,260

17.0

(9,119)

(11.0)

Domestic

7,413

7,775

(362)

(4.7)

Overseas

66,728

75,485

(8,757)

(11.6)

Farm & Industrial Machinery

372,098

83.7

414,247

84.5

(42,149)

(10.2)

Domestic

78,267

17.6

86,978

17.8

(8,711)

(10.0)

Overseas

293,831

66.1

327,269

66.7

(33,438)

(10.2)

Pipe‐ and Infrastructure‐related Products

41,078

9.2

43,545

8.9

(2,467)

(5.7)

Domestic

33,269

37,099

(3,830)

(10.3)

Overseas

7,809

6,446

1,363

21.1

Environment‐related Products

24,396

5.5

24,592

5.0

(196)

(0.8)

Domestic

21,658

22,450

(792)

(3.5)

Overseas

2,738

2,142

596

27.8

Water & Environment

65,474

14.7

68,137

13.9

(2,663)

(3.9)

Domestic

54,927

12.3

59,549

12.1

(4,622)

(7.8)

Overseas

10,547

2.4

8,588

1.8

1,959

22.8

Other

7,055

1.6

7,733

1.6

(678)

(8.8)

Domestic

6,972

1.6

7,628

1.6

(656)

(8.6)

Overseas

83

0.0

105

0.0

(22)

(21.0)

Total

¥

444,627

100.0

¥

490,117

100.0

¥

(45,490)

(9.3)

Domestic

140,166

31.5

154,155

31.5

(13,989)

(9.1)

Overseas

304,461

68.5

335,962

68.5

(31,501)

(9.4)

Note:

In conformity with the change in the business reporting structure of the Company, the amounts related to "Air‐conditioning equipment" are reported in the "Pipe‐ and Infrastructure‐related Products", whereas they were formerly reported in the "Farm Equipment and Engines", and the amounts related to "Pumps" and the amounts related to "Valves for private sector" are reported in the "Environment‐related Products", whereas they were formerly reported in the "Pipe‐ and Infrastructure‐related Products". The information for the same period in the prior year has been retrospectively adjusted to conform to the current fiscal year's presentation.

‐18‐

Disclaimer

Kubota Corporation published this content on 04 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2020 06:06:18 UTC


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Financials
Sales 2020 1 834 B 17 525 M 17 525 M
Net income 2020 126 B 1 208 M 1 208 M
Net Debt 2020 493 B 4 709 M 4 709 M
P/E ratio 2020 21,0x
Yield 2020 1,65%
Capitalization 2 592 B 24 798 M 24 770 M
EV / Sales 2020 1,68x
EV / Sales 2021 1,51x
Nbr of Employees 41 027
Free-Float 97,1%
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Technical analysis trends KUBOTA CORPORATION
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 2 078,67 JPY
Last Close Price 2 167,00 JPY
Spread / Highest target 15,4%
Spread / Average Target -4,08%
Spread / Lowest Target -30,8%
EPS Revisions
Managers
NameTitle
Yuichi Kitao President & Representative Director
Masatoshi Kimata Chairman
Shinji Sasaki Director, General Manager-Research & Development
Muneji Okamoto Executive Officer & Senior GM-Machine Technology
Toshihiko Kurosawa Director & Senior Managing Executive Officer
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