Notice of Revised Business Forecast

This is to inform you that due to recent trends in business performance, Komatsu Ltd. has revised its forecast for the fiscal year ending March 2002, published on May 7 along with the business results for the previous fiscal year, as stated below. Incidentally, Komatsu's consolidated financial statements conform to the accounting principles generally accepted in the United States of America.

I. Interim Term (April 1, 2001 - September 30, 2001)

1. Revised Consolidated Forecast for Interim Term
(Millions of yen)

		Net Sales		Pre-tax Income		Net Income
Previous Forecast (A)		550,000		8,000		3,500
Revised Forecast (B)		510,000		-5,000		-5,000
Amount of Change (B) - (A)		-40,000		-13,000		-8,500
Rate of Change (%)		-7.3		-		-
Actual Figures for the Previous Term		554,530		11,195		3,152

		Net Sales		Ordinary Profit		Net Income
Previous Forecast (A)		200,000		6,000		4,000
Revised Forecast (B)		185,000		2,500		2,500
Amount of Change (B) - (A)		-15,000		-3,500		-1,500
Rate of Change (%)		-7.5		-58.3		-37.5
Actual Figures for the Previous Term		206,929		4,307		3,719

		Net Sales		Pre-tax Income		Net Income
Previous Forecast (A)		1,120,000		21,000		8,000
Revised Forecast (B)		1,060,000		7,000		1,000
Amount of Change (B) - (A)		-60,000		-14,000		-7,000
Rate of Change (%)		-5.4		-66.7		-87.5
Actual Figures for the Previous Term		1,096,369		20,064		6,913

		Net Sales		Ordinary Profit		Net Income
Previous Forecast (A)		430,000		14,000		8,000
Revised Forecast (B)		410,000		11,000		7,000
Amount of Change (B) - (A)		-20,000		-3,000		-1,000
Rate of Change (%)		-4.7		-21.4		-12.5
Actual Figures for the Previous Term		430,270		11,281		7,222

III. Reasons for the Revision
In the construction and mining equipment business, domestic demand for construction equipment is anticipated to significantly decrease from that previously forecast due to the adverse effect of curtailed construction investment led by sluggish public outlays. Overseas, although sales in China made gains and the mining equipment market experienced a rebound, in the key North America market, demand continued to decline, and in Southeast Asia, market recovery was delayed. All in all, these developments led to lower than expected earnings being forecast.
In the electronics business, a steep recession in the global semiconductor industry impacted the silicon wafer industry, causing the market to remain very soft. As a result, the performance of Komatsu Electronic Metals Co., Ltd. is expected to deteriorate more than previously forecast. Even demand for thermoelectric modules for optical communications, which grew significantly in the pervious term, declined sharply, and the situation is expected to continue. Thus, earnings are seen falling from those initially forecast.
In future, Komatsu will strive to secure earnings through full-scale marketing of its GALEO series of construction equipment in Japan and make company-wide efforts to further reduce fixed costs. However, given the outlook for a continued difficult management environment, the consolidated and non-consolidated forecasts for the interim- and full-year terms have also been revised downward as stated earlier.

Last updated:2001/08/30 15:08

Komatsu Ltd. Masahiro Sakane, President. Nobuyuki Kanatomi, General Manager, Public Relations & Advertising Dept., as liaison.

TEL : +81-3-5561-2616

URL: http://www.komatsu.com/