The board of directors of Toyo Engineering Corporation(TOYO) resolved today the following revision to the consolidated financial forecast for the fiscal year ending March 31, 2018, which were announced on February 7, 2018, due to further increase in loss for ethylene project currently being implemented in the USA.
1. Revision to the consolidated financial forecasts for the fiscal year ending March 31, 2018 (from April 1, 2017 to March 31, 2018)
| Net Sales | Operating Income | Ordinary Income | Profit Attributable to Owners of Parents |
Net Income Per Share | |
| Previous Forecast (A) | Millions of Yen 350,000 |
Millions of Yen (18,000) |
Millions of Yen (16,000) |
Millions of Yen (18,000) |
Yen (469.54) |
| Revised Forecast (B) | 335,000 | (33,000) | (27,000) | (27,000) | (704.29) |
| Increase (Decrease)(B) – (A) | (15,000) | (15,000) | (11,000) | (9,000) | |
| Percentage Increase (Decrease)% | (4.3%) | - | - | - | |
| (Reference)Results for the FY ended March 31, 2017 | 431,917 | (2,009) | 1,603 | 1,472 | 38.42 |
2. Major reasons of the revision
Due to increase of construction cost and lower construction progress than expected at ethylene project in the USA, net sales are expected to decrease by 15,000 millions of Yen from the previous forecast to 335,000 millions of Yen and operating income are expected to decrease by 15,000 millions of Yen from the previous forecast to loss of 33,000 millions of Yen. Due to improvement of equity in earnings of affiliates, ordinary income is expected to decrease by 11,000 millions of Yen to loss of 27,000 millions of Yen. After considering increase of extraordinary income and decrease of taxes, profit attributable to owners of parents is expected to decrease by 9,000 millions of Yen to loss of 27,000 millions of Yen.
With regards to ethylene project currently being implemented in the USA, construction work had proceeded while taking measures to improve productivity since January 2018. However, because delay in piping work due to the fact that welding workers are not mobilized sufficiently by one main construction contractor had affected following electrical and instrumentation work, there were growing concerns about further delay in the overall construction progress and increase in construction cost accompanying the delay. Therefore, for recovery of delay and acceleration of construction progress by boosting mobilizing capacity and productivity, TOYO implemented measures to transfer half of the remaining construction work from the main construction contractor to other two contractors who are engaged newly and to strengthen the organizational capabilities of TOYO and construction companies in a more integrated and timely manner. Accordingly, TOYO anticipates substantial increase in construction contractor cost and management personnel related cost.
3. Recognition of non-operating income (equity in earnings of affiliates)
Because of improvement of profitability associated with projects implemented by affiliates in Brazil and Singapore, Toyo expects to recognize 6,000 millions of Yen as non-operating income (equity in earnings of affiliates) for the fiscal year ending March 31 2018 (out of which, 1,769 millions of Yen has been already booked up to 3rd quarter of the fiscal year).
(Remark) The forecast of consolidated results above was compiled based on the information available at the time of announcement. Due to various factors, actual business results may differ from the predicted figures in some cases.