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Komatsu cuts profit target as mining demand drops

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Weak demand in the resource sector has forced mining equipment manufacturer Komatsu to cut its full-year operating profit forecast by a third to $2.16 billion.

Komatsu said the drop in demand for mining equipment had been worse than expected, stating it expects operating profit for the year to next March to total 210 billion yen ($2.16 billion), down from its prior forecast of 305 billion yen.

"The tough mining market prompted us to cut our outlook," Komatsu chief financial officer Mikio Fujitsuka said in Tokyo.

The company said demand from Latin America, Indonesia and Australia had waned, but that growth in Japan and China was expected.

Heavy equipment maker Caterpillar has also cut its full-year profit forecast, blaming weak demand for mining equipment.

BHP and Rio are among Komatsu customers who have announced billions of dollars worth of cuts to capital expenditure over the coming years.

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