United Tractors - Still assessing impact from Japan's natural disaster - Deutsche Bank

Still assessing the impact from Japan's earthquake and tsunami
At this stage, it is too early to estimate the impact from the catastrophe in Japan on 11 March 2011 as United Tractors (UNTR) is still waiting for Komatsu to complete its full assessment on the production capability including component value chain, power supply, logistic and infrastructure. Beside in Japan, Komatsu has manufacturing facilities in 14 different countries - the US, Brazil, UK, Germany, Italy, Czechia, Sweden, Norway, Russia, Indonesia, Thailand, Thailand, India and China.

Utilizing facilities from different country
Komatsu has been utilizing its facilities in Japan, US and Germany to supply large heavy equipments to UNTR. There are no details on unit contribution from Japan to large equipment supply. These large equipments account for 20% of UNTR's heavy equipment sales volumes and some 50% of UNTR's heavy equipment revenues. UNTR claims that it has an inventory of readyto- sell equipment for two months ahead until April 2011. Based on our sensitivity, every 10% decline in large heavy equipment sales volumes would result in 1.1% decline in UNTR's net earnings.