For the 6 months ended June 30, 2021, revenue of Kubota Corporation and its subsidiaries increased by $1.9 billion (+24.6%) from the same period in the prior year to $10 billion. 

Domestic revenue increased by $110 million (+4.3%) from the same period in the prior year to $2.7 billion because of increased revenue in Farm & Industrial Machinery mainly due to increased sales of farm equipment, despite a decrease in revenue in Water & Environment and Other.

Overseas revenue increased by $1.9 billion (+34.5%) from the same period in the prior year to $7.1 billion because of significantly increased sales of farm equipment and construction machinery, while revenue in Water & Environment decreased from the same period in the prior year.

Operating profit increased by $600 million (+80.7%) from the same period in the prior year to $1.3 billion mainly due to significantly increased revenue in the domestic and overseas markets and improved foreign exchange rates, while there were some negative effects from increased fixed costs and a rise in material prices. Profit before income taxes increased by $590 million (+77%) from the same period in the prior year to $14 million due to increased operating profit. Income tax expenses were $340 million. Share of profits of investments accounted for using the equity method was $14 million. Profit for the period increased by $430 million (+73.6%) from the same period in the prior year to $1 billion. Profit attributable to owners of the parent increased by $390 million (+72.8%) from the same period in the prior year to $930 million.

Farm & Industrial Machinery Results

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

Revenue in this segment increased by 30.9% from the same period in the prior year to $8.5 billion and accounted for 85.5% of consolidated revenue.

Domestic revenue increased by 10.9% from the same period in the prior year to $1.5 billion. Sales of farm equipment and agricultural-related products increased due to a recovery from adverse reaction from rushed demand before the consumption tax hike and increased demand resulting from subsidies for business continuation of farmers.

Overseas revenue increased by 35.9% from the same period in the prior year to $7.1 billion. In North America, sales of tractors and construction machinery increased significantly mainly due to strong demand along with trend in move to suburbs despite delay in production and shipment caused by port congestion and labor shortages. In addition, sales of engines recovered. In Europe, sales of construction machinery, tractors and engines increased due to a recovery from sluggish sales along with the infection spread of COVID-19 in the prior year. In Asia outside Japan, sales of farm equipment in Thailand significantly increased mainly due to favorable weather conditions and stable crop prices at a high level. In addition, sales of farm equipment in China, India, and Philippines were strong as well. In Other areas, sales of tractors and construction machinery in Australia increased significantly due to more rainfall than usual and government stimulus policies.

Operating profit in this segment increased by 65.1% from the same period in the prior year to $1.3 billion mainly due to significantly increased revenue in the domestic and overseas markets and deteriorated profitability of products, which had been shipped in the same period in the prior year, in its manufacturing bases, while some negative effects from increased fixed costs and a rise in material prices.

Forecasts for 2021

The Company revised its forecasts for revenue for the year ending Dec. 31, 2021 upward to $19.4 billion, an increase of $900 million from the previous forecasts, which were announced on Feb. 15, 2021. This revision was made because overseas revenue is expected to increase due to a significant increase in sales of farm equipment in Asia outside Japan and more favorable exchange rates for the yen than forecast, in addition to strong sales of tractors and agricultural-related products in domestic market.

Operating profit was revised to $2.4 billion, an increase of $360 million from the previous forecasts based on the revised revenue forecast and exchange rate trends. Profit before income taxes was revised to $2.4 billion, an increase of $340 million from the previous forecasts and profit attributable to owners of the parent was revised to $1.7 billion, an increase of $230 million from the previous forecasts.

The infection of new variants of COVID-19 is spreading around the world. If the situation with COVID-19 gets worse, there is a possibility that the Company’s results of operations will be affected. However, the impact is not included in these forecasts because it is difficult to make assumptions at this point.