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Joy squeaks a profit on income tax rebate

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World Coal,

Mining equipment manufacturer, Joy Global, has reported an operating loss of US$5.2 million for the three months ending 29 July, compared to an operating profit of US$82.2 million in the same period last year.

“The US$87 million year-over-year decrease in operating income in the quarter was due to lower sales volumes, unfavourable product mix, lower manufacturing absorption, restructuring charges and merger costs,” said the company. The company also recorded interest payments of over US$11 million, bringing the loss before income taxes of US$16.2 million.

Sales were 30% down in the company’s underground segment at US$318 million and 21% down is the company’s opencast segment at US$288 million. Services accounted for US$468 million of the sales, while original equipment just US$118 million.

Original equipment sales in the underground segment were down 40% year on year with declines in Africa, Australia and China more than offsetting increases in Eurasia and North America. Service sales in the underground segment fell 25% with service sales in the US down 30% year-on-year.

On the opencast equipment sales side, original equipment sales were down 31% year-on-year, with an increase in Australia more than offset by declines in all other regions. Service sales were down 19% with declines in all regions apart from Eurasia.

Despite the operating loss, the company squeaked into profit after a US$16.4 million rebate of income taxes resulting in net income of US$0.128 million. This compares with next income of US$51.3 million in 1H15.

Joy recently announced that it had accepted a takeover offer of US$3.7 billion from Komatsu, which will leave the mining equipment market dominated by the Japanese firm and US rival, Caterpillar.

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