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United Tractors sees lower Komatsu sales, bigger construction portion
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An instructor shows students a Komatsu part during a heavy machinery course at the United Tractors (UT) School. (Courtesy of http://www.unitedtractors.com//-)
H
eavy equipment distributor United Tractors Tbk (UT) reported a significant year-on-year (yoy) decline in heavy equipment sales in the first four months of the year, as the construction sector took over the mining sector’s domination in terms of sales contribution.
The subsidiary of conglomerate Astra International Tbk sold 689 units of Komatsu heavy equipment from January to April 2016, a 28.7 percent plunge compared with the 966 units marketed in the same period last year.
UT spokesperson Ari Setiyawan said the company had won 35 percent of the market share in the heavy equipment industry. During April the company booked 190 units, with 52 percent coming from the construction sector--which has been thriving due to the government's efforts to boost infrastructure projects.
In the same period last year, it was the mining sector that dominated the sales with 34 percent of contribution. In January to April 2016, the mining sector's contribution fell to only 21 percent. The forestry and agriculture sectors contributed 15 percent and 12 percent in sales, respectively.
The mining contractor business, represented by Pamapersada Nusantara, struggled with a weak performance. In the first four months of the year, it saw an overburden removal of 217.6 million billion cubic meters, a 9.1 percent yoy drop with a 5 percent production drop to 32.1 million tons.
While the company sold 2.19 million tons of coal during the period, a slight increase compared with 2 million tons in the same period last year, it suffered a monthly sales drop to 448,000 tons in April compared with 595,000 tons in March.
UOB Kay Hian analyst Franky Kumendong, in research released on May 26, predicted a drop in Komatsu sales by 10.6 percent this year, mainly driven by the sluggish mining and plantation industries.
He recommended a “hold” for the company’s stock UNTR on the market, with a target price of Rp 12,500 per share. (ags)
