Tokyo, May 19, 2003 - (JCN Newswire) - Chiyoda Corporation., Ltd. (TSE: 6366), one of Japan's leading integrated engineering and construction companies, reported FY02 full term earnings for the period ending March 31, 2003. New orders rose 14.3% year/year to 249.093 billion yen while construction contracts rose 17.6% year/year to 166.367 billion yen. Gross profit surged by 123.1% to 10.443 billion yen. Operating profit returned to the black for the first time in three years with a positive showing of 1.5 billion yen
The Japanese plant market is benefiting from capital investment in energy efficiency in order to reduce CO2 emissions in the petroleum industry, and the shift in the chemical industry from general chemical products to higher value-added products for the major consumer market China. Despite growth in these specific areas the overall business environment in the domestic plant market remains rather weak.
The overseas plant market was affected by some political instability in oil-producing counties with general strikes in Venezuela earlier in the year and the recent war in Iraq. Nonetheless demand has been increasing for capital expansion projects for natural gas plants in Oman, Qatar and the UAE. In the Chinese market, major American and European firms are moving ahead with large-scale petrochemical plants.
Against this operating backdrop, consolidated domestic new orders for the year dropped 23.7% to 68.650 billion yen while overseas new orders rose 40.9% year/year to 180.488 billion yen, for a total of 249.093 billion yen of new orders, a healthy increase of 14.3 % year/year.
As a result of this order trend revenue from domestic construction contracts fell 13.9% year/year to 83.053 billion yen, while revenue from overseas construction contracts rose 84.8% year/year to 83.313 billion yen. Total revenue from construction contracts came to 166.367 billion yen, an increase of 17.6% year/year.
Gross profit surged 123.1% over last year to 10.443 billion yen, while the Company's efforts to further cut selling, administrative and administration expenses contributed to the first positive operating profit in 8 years, of 1.548 billion yen. Ordinary profit was in the black for the first time in 3 years, at 2.393 billion yen, in part due to repayment of debts thereby reducing the interest burden. Net income was 1.999 billion yen, an increase of 1,546.5% year/year.
On a non-consolidated basis, the Company secured 42.820 billion yen in new domestic orders, down 30.9% year/year, and 169.417 billion yen in overseas new orders, up 39.5% year/year, for a total of 212.220 billion yen, an increase of 15.7% year/year. This performance exceeded the target of 180 billion yen by almost 20%.
Revenue from domestic construction contracts was 54.596 billion yen, a decrease of 22.7% year/year, and 75.873 billion yen from overseas construction contracts, an increase of 116.7% year/year. Overall revenue totaled 130.470 billion yen, an increase of 23.5% year/year. Gross profit surged 1,786.4% to 6.990 billion yen while operating profit was positive for the first time in 7 years at 618 million yen. The Company posted a positive ordinary profit for the first time in 3 years of 2.31 billion yen, and net income was up 4,883.1% year/year to 2.684 billion yen. The Company reached targeted positive profits for operating profit, ordinary profit and net income.
Outlook
The Japanese economy will remain in the mire for the foreseeable future, due to the effects of long-term structural problems such as the delay in writing off non-performing loans and a chronically weak stock market. However demand for energy-related investment in clean fuel and environmental equipment and new capital investment in specialty chemicals is strong. Overseas, given the still cautious outlook for the U.S. economy, the overall future investment environment looks rather uncertain. Having said that the LNG market, where Chiyoda maintains technical superiority, will benefit from the ongoing strong demand to switch to cleaner energy. And the market for large-scale petrochemical plants, of which ethylene forms the core, will continue to see active investment in the Middle East and Asia due to attractive gas prices.
Based on the business environment described above, for the fiscal year ending March 2004, the Company expects new orders to come to 270 billion yen, revenue from construction contracts of 200 billion yen, consolidated ordinary profit of 4.2 billion yen, and consolidated income of 3.4 billion yen (assuming an exchange rate of 1 dollar = 120 yen). These forecasts are founded on the expectation that large-scale LNG facility construction projects, primarily overseas, will progress from the planning to the construction stage.
The Company expects on a non-consolidated basis, new orders of 230 billion yen, revenue from construction contracts totaling 160 billion yen, ordinary profit of 3.5 billion yen, and net income of 3.3 billion yen for the next fiscal year.
Financial Statements
1. Consolidated Balance Sheets
[in Millions of Yen]
March 31, March 31,
2003 % 2002 % Diff.
Assets
Current Assets
Cash and time deposits 36,112 40,451 (4,338)
Notes and accounts receivable 25,374 27,580 (2,205)
Costs of construction contracts
in process 21,105 23,909 (2,804)
Deferred tax assets 194 129 65
Jointly controlled asset of
joint venture 8,672 8,222 449
Other 6,098 2,376 3,722
Allowance for doubtful accounts (628) (367) (260)
Total Current Assets 96,929 80.6 102,302 79.1 (5,372)
Fixed Assets
Property, plant and equipment
Buildings and structures 6,675 6,730
Accumulated depreciation 3,199 3,086
Book value of buildings
and structures 3,476 3,644 (167)
Machinery and equipment 959 1,220
Accumulated depreciation 825 965
Book value of machinery
and equipment 134 255 (120)
Tools, furniture and fixtures 5,177 5,423
Accumulated depreciation 4,249 4,472
Book value of tools,
furniture and fixtures 928 950 (21)
Land 2,526 2,691 (164)
Total property, plant and equipment 7,067 5.9 7,541 5.8 (474)
Intangible fixed assets 2,317 1.9 2,247 1.8 69
Investments and other assets
Investment securities 4,206 4,563 (357)
Long-term loans 631 37 594
Long-term accounts receivable 5,793 6,265 (472)
Long-term receivables 5,650 10,125 (4,474)
Deferred tax assets 82 101 (19)
Other investments 2,367 2,992 (625)
Allowance for doubtful accts (4,485) (6,864) 2,378
Allowance for capital loss
on investments (263) - (263)
Total investments and other assets 13,983 11.6 17,222 13.3 (3,238)
Total Fixed Assets 23,367 19.4 27,011 20.9 (3,643)
Total Assets 120,297 100.0 129,314 100.0 (9,016)
Liabilities and Shareholders' Equity
Current Liabilities
Notes and accounts payable 46,511 40,343 6,167
Short-term loans 8,202 17,456 (9,254)
Income taxes payable 294 488 (193)
Advance receipts on construction
contracts 25,172 33,713 (8,540)
Deferred tax liabilities - 17 (17)
Indemnity allowance for
completed construction 694 834 (140)
Accrued bonuses 1,375 1,217 158
Allowance for contingency loss 800 - 800
Other 6,354 6,845 (491)
Total Current Liabilities 89,404 74.3 100,915 78.0 (11,510)
Non-Current Liabilities
Long-term debt 10,422 10,672 (249)
Deferred tax liabilities 9 27 (17)
Liability for retirement benefit 2,910 1,829 1,081
Liability for retirement benefit
to directors 270 195 75
Other liabilities 111 78 32
Total Non-Current Liabilities 13,724 11.4 12,803 9.9 921
Total Liabilities 103,129 85.7 113,718 87.9 (10,589)
Minority Interests 499 0.4 492 0.4 6
Shareholders' Equity
Common stock 12,027 10.0 12,027
Additional paid-in capital 5,818 4.8 5,818
Retained earnings (496) (0.4) (496)
Net unrealized loss on
available-for-sale securities 10 0.0 10
Foreign currency
translation adjustments (642) (0.5) (642)
Treasury stock (48) (0.0) (48)
Total Shareholders' Equity 16,669 13.9 16,669
Shareholders' Equity
Common stock 12,027 9.3 (12,027)
Additional paid-in capital 5,818 4.5 5,818)
Total Shareholders' Equity 17,846 13.8 (17,846)
Accumulated deficit 2,516 (1.9) (2,516)
Net unrealized loss on
available-for-sale securities (1) (0.0) 1
Foreign currency translation
adjustments (219) (0.2) 219
Treasury stock (5) (0.0) 5
Total Shareholders' Equity 15,103 11.7 (15,103)
Liabilities, Minority Interests
and Shareholders' Equity 120,297 100.0 129,314 100.0 (9,016)
2. Consolidated Statements of Income
[in Millions of Yen]
March 31, March 31,
2003 % 2002 % Diff.
Completed Construction Contracts 166,367 100.0 141,505 100.0 24,861
Cost of Construction Contracts 155,924 93.7 136,825 96.7 19,098
Gross profit 10,443 6.3 4,679 3.3 5,763
Selling, General and
Administrative Expenses 8,894 5.4 9,826 6.9 (932)
Operating profit 1,548 0.9 - - 1,548
Operating loss - - 5,146 (3.6) (5,146)
Non-Operating Income
Interest 331 645
Dividend income 28 16
Foreign exchange gain - 870
Gain on sales of marketable
and investment securities - 436
Equity in earnings of
associated companies 1,000 526
Rent income 205 -
Other 186 269
Total Non-Operating Income 1,751 1.0 2,765 1.9 (1,013)
Non-Operating Expenses
Interest expense 528 844
Foreign exchange loss 178 -
Real estate rent 93 -
Other 106 140
Total Non-Operating Expenses 906 0.5 984 0.7 (78)
Ordinary profit 2,393 1.4 - - 2,393
Ordinary loss - - 3,366 (2.4) (3,366)
Extraordinary Gain
Gain on discharge of liabilities - 2,871
Gain on sales of investments
in subsidiaries 314 1,385
Reversal of additional retirement
benefits to employees - 964
Gain on sale of intellectual
property rights - 800
Reversal of liability for retirement
benefits to directors - 383
Reversal of allowance for
doubtful accounts 1,167 -
Adjustments to previous period
earnings 184 -
Other 42 32
Total Extraordinary Gain 1,708 1.0 6,436 4.6 (4,727)
Extraordinary Loss
Allowance for contingency loss 800 -
Loss on devaluation of golf
membership 294 -
Investment loss allowance 263 -
Loss on sale of fixed assets 79 -
Allowance for doubtful accounts - 580
Loss on devaluation of investment
securities - 334
Loss on disposal of fixed asset - 143
Other 155 150
Total Extraordinary Loss 1,593 0.9 1,208 0.9 384
Income before income taxes and
minority interests 2,508 1.5 1,860 1.3 648
Income taxes current 951 1,786
Foreign tax refunded (317) -
Income taxes deferred (146) (88)
Total Tax 487 0.3 1,697 1.2 (1,210)
Minority interests in net income 22 (0.0) 41 (0.0) (19)
Net income 1,999 1.2 121 0.1 1,877
About Chiyoda Corporation
Chiyoda Corporation (TSE: 6366) is a leading Japanese integrated engineering and construction company with a significant presence both domestically and overseas in key markets such as Asia, the Middle East and other parts of the world. Chiyoda Corporation retains technical superiority in areas such as LNG plants. The company has successfully completed an extensive restructuring program in recent years in order to return to profitability.
Contact:
Takuhiro Murata
Corporate Communications Office
Chiyoda Corporation
Tel: 81-45-506-7538,
Fax: 81-45-506-7085
E-mail: tamurata@ykh.chiyoda.co.jp
May 19, 2003
Source: Chiyoda Corporation
Chiyoda Corporation (TSE: 6366)
From the Japan Corporate News Network
http://www.japancorp.net
Topic: Earnings
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