For the year ended Dec. 31, 2021, revenue of Kubota Corporation and its subsidiaries increased by $3 billion (+18.5%) from the prior year to $19 billion.

Domestic revenue increased by $66 million (+1.3%) from the prior year to $5.2 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 $2.9 billion (+26.7%) from the prior year to $13.8 billion because of significantly increased revenue of farm equipment and construction machinery, while revenue in Water & Environment decreased from the prior year. As a result, overseas revenue accounted for 72.6% of consolidated revenue, which increased by 4.7 percentage points from the prior year.

Operating profit increased by $0.6 billion (+40.5%) from the prior year to $2.1 billion mainly due to significantly increased revenue in the domestic and overseas markets and favorable impact of foreign exchange rates, while there were some negative effects from soaring material prices and logistics expenses. Profit before income taxes increased by $0.6 billion (+35.9%) from the prior year to $2.2 billion due to increased operating profit. Income tax expenses were $0.6 billion. Share of profits of investments accounted for using the equity method was $26 million. Profit for the year increased by $43 million (+34.9%) from the prior year to $1.7 billion. Profit attributable to owners of the parent increased by $410 million (+36.7%) from the prior year to $1.5 billion.

Farm & Industrial Machinery

Farm & Industrial Machinery is composed of farm equipment, agricultural-related products, engines and construction machinery. Revenue in this segment increased by 23.6% from the prior year to $16.1 billion and accounted for 84.9% of consolidated revenue.

Domestic revenue increased by 6% from the prior year to $2.7 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 27.8% from the prior year to $13.4 billion. In North America, sales of tractors and construction machinery increased significantly due to strong demand along with trend in move to suburbs despite continued delay in procurement caused by disrupted supply chains. In Europe, sales of construction machinery, tractors, and engines increased due to continued recovery trend 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 increased significantly mainly due to favorable weather conditions and strong market of dryland farming supported by stable high crop prices. In addition, sales of farm equipment in India were strong as well. In Other areas, sales of tractors and construction machinery in Australia increased significantly due to government stimulus policies.

Operating profit in this segment increased by 39.1% from the prior year to $2.3 billion due to significantly increased revenue in the domestic and overseas markets, raised product price, and favorable impact of foreign exchange rates, while there were a negative effect from soaring material prices and logistics expenses.

Forecasts

Consolidated revenue for the year ending Dec. 31, 2022 is forecast to increase by $2.2 billion from the prior year to $21.2 billion. In the domestic market, revenue in Farm & Industrial Machinery is expected to remain at the same level as the prior year due to termination of subsidies for business continuation of farmers. On the other hand, revenue in Water & Environment is expected to increase due to sales price increase. Overseas revenue is expected to increase because revenue in Farm & Industrial Machinery is expected to increase due to solid demand in North America and Europe, in addition to an increase in revenue in Water & Environment.

Operating profit is forecast to be $2.2 billion. An impact of sales price increase comes out after a period of time and cannot compensate an increase of raw material cost and logistics expenses fully in FY2022 albeit there is a positive effect from an increase in revenue. Profit before income taxes is forecast to be $2.2 billion. Profit attributable to owners of the parent is forecast to be $1.5 billion.

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