MIRA
INFORM REPORT
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Report Date : |
13.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
MITSUI ENGINEERING & SHIPBUILDING CO LTD |
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Registered Office : |
5-6-4 Tsukiji Chuoku Tokyo 104-8439 |
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Country : |
Japan |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
July 1937 |
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Legal Form : |
Limited Company (Kabushiki Kaisha) |
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Line of Business : |
Shipbuilding and Heavy Machinery Manufacturer |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
YEN 11,966.8 Million |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
name & address
MITSUI ENGINEERING
& SHIPBUILDING CO LTD
REGD NAME: Mitsui Zosen KK
MAIN OFFICE: 5-6-4 Tsukiji Chuoku Tokyo 104-8439 JAPAN
Tel:
033544-3147 Fax: 03-3544-3050
* The given
address is its Oita Shipyard at: 3 Hiyoshibaru Oita City, as given
E-Mail
address: prdept@mes.co.jp
ACTIVITIES
Shipbuilding & heavy machinery mfg
BRANCHES
Osaka, Nagoya, other
OVERSEAS
Singapore, Beijing, Shanghai, Jakarta, London, New York,
Hong Kong, Hanoi
FACTORY(IES)
Tamano (Okayama), Ichihara (Chiba), Oita (as given)
CHIEF EXEC
YASUHIKO KATOH, PRES
Yen
Amount: In million Yen,
unless otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen 659,215 M
PAYMENTS REGULAR CAPITAL Yen 44,384 M
TREND STEADY WORTH Yen 175,642 M
STARTED 1937 EMPLOYES 9,910
COMMENT
SHIPBUILDING
& MFG OF HEAVY ELECTRIC MACHINERY.
FINANCIAL
SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY
BUSINESS
ENGAGEMENTS.
MAX
CREDIT LIMIT: YEN 11,966.8 MILLION, 30 DAYS NORMAL TERMS.
Forecast (or estimated) figures for 31/03/2009 fiscal term
HIGHLIGHTS
The subject company was founded
originally in 1917 as Shipbuilding Division of Mitsui & Co Ltd, leading
general trading house of Japan, Tokyo, in Tamano City, Okayama-Pref. In 1926, entered into technical licensing
agreement with Burmeister & Wain A/S of Denmark for marine diesel engine
production. In 1937, separated from
Mitsui & Co Ltd to become Tama Shipyard Co Ltd, and in 1942 renamed as
captioned.
This
is one of major mfrs in shipbuilding and heavy electric machinery. Ranked top in marine diesel engine
production in Japan. One of core
members of Mitsui Group firms.
Shipbuilding is the core which alone accounts for about 46% of total
sales. Group shipping firm, Mitsui-OSK
Lines, is aggressively ordering dry bulkers of 50/60,000 ton size, on the back
of robust transportation needs into and from China. Actively advancing into new businesses, including cogeneration,
environment-related business & IT sector including clean rooms.
Shipbuilding
berths are filled up until 2012.
Domestic marine engine production capacity growing up 20% to 6 million
hp, and JV in Shanghai boosting production up 70% to 3 million hp in Mar 2011
term.
(Recent News from the Nikkei):
Dated 29/Oct/2008: Oversupply
of new ships widely expected to peak around 2010 may not take place after all
as the worldwide financial crisis effectively thins out the completion. Many emerging shipbuilders, which have
mushroomed recently in Korea & China, will likely be forced out of business
due to funding difficulties, leading supply to strike a rough balance with real
demand. Shipbuilding market is seen as
slowing amid spreading financial crisis.
Business talks on building new ships have nearly been halted owing to
the worsening funding environment of ship owners, says Tamiyoshi Iwasaki, mgn
dir of Mitsui Engineering. Some owners
are asking shipbuilders to postpone deliveries or are cancelling orders, with
20%-30% of orders/building are subject to such requests, says industry
officials. If new shipbuilders in Korea
& China, which have swollen their order books to an extent that apparently
exceeds real demand, go bust due to funding troubles, an industry official says
that shipbuilding market would be restored to health and the so-called 2010
supply glut should disappear.
Dated 11/Nov/2008: Mitsui
Engineering won order fro solar thermal test plant from Abu Dhabi Future Energy
Co of Arab Emirates & Cosmo Oil Co (Japan). Construction will begin in May 2009 with completion slated end
2009. The order is valued at around Yen
800 million. The project is part of Abu
Dhabi’s plans to build a carbon-free city using sunlight & other natural
energy.
FINANCIAL INFORMATIIN
The
sales volume for Mar/2008 fiscal term amounted to Yen 659,215 million, a 5.9%
up from Yen 622,800 million in the previous term. Newbuilding ship orders exceeded Yen 800 billion for three
consecutive years. By divisions,
Shipbuilding up 18.9% to Yen 302,337 million, supported by robust demand for bulk
carriers, container ships, tankers, etc particularly transportation needs into
China; Steel Structure Construction was down 8.7% to Yen 53,787 million, due to
decreased public works orders; Machinery up 3.2% to Yen 7,444 million, the
highest record; Plants up 24.3% to Yen 100,062 million, supported by robust
plastic plants orders into S/E Asia.
Operating profits and recurring profits recorded record highs, except
the net profits. The operating profit
was posted at Yen 36,116 million and the recurring profit at Yen 32,232
million, respectively, compared with Yen 20,712 million operating profit and
Yen 18,614 million recurring profit, respectively, a year ago. The net profit, however, decreased to Yen
16,560 million from Yen 19,416 million, due largely to skyrocketing oil prices
and material steel costs.
(Apr/Sept/2008
results): Sales Yen 285,832 million (down 1.7%), operating profit Yen 4,584
million (down 67.8%), recurring profit Yen 4,276 million (down 66.8%), net
profit Yen 514 million (down 87.8%). (%
compares with the corresponding period a year ago). Shipbuilding prices increased, which pushed the sales upwards,
but higher material steel prices and increased subcontracting expenses hurt
profits badly. Sales decrease is
referred to delayed deliveries of some plants.
Profits deterioration is due to: rising material steel & other
prices, fall-down accident of cranes at a plant site, delayed delivery of
material steel products, etc.
For
the current term ending Mar 2009 the recurring profit is projected at Yen
24,000 million (revised down from the earlier projection of Yen 27,000 million)
and the net profit at Yen 13,000 million, respectively, on a 7.7% rise in
turnover, to Yen 710,000 million.
Operating profit is revised downward to Yen 27,000 million from the
earlier projection of Yen 30,000 million.
Sales are left unchanged as holding backlogs and delayed deliveries of
ships & plants into the second half.
The profits decline is referred to, as the firm says: additional costs
due to the reasons cited above in Apr/Sept/2008 results, also includes
arbitration costs in UK of around Yen 1,000 million as extraordinary
losses. Now the shipbuilding accounts
for 46% of total sales. Plants &
bridges will improve.
The
financial situation is considered FAIR and good for ORDINARY business
engagements. Max credit limit is
estimated at Yen 11,966.8 million, on 30 days normal terms.
REGISTRATION
Date
Registered: Jul 1937
Legal
Status: Limited Company
(Kabushiki Kaisha)
Authorized: 1,500 million shares
Issued: 830,987,176 shares
Sum: Yen 44,384 million
Major shareholders (%)
Mitsui & Co (5.1), Japan Trustee Services
Bank T (4.6), Master Trust Bank of
Japan T (3.7), Goldman Sachs Int’l (3.6), Hyakujushi Bank (3.4), JTSB (Chuo
Mitsui Trust & Banking)
(2.8), Mitsui Life Ins (1.9), SMBC (1.6), Mitsui Sumitomo Marine Ins (1.6); foreign owners (19.1)
No. of
shareholders: 66,939
Listed
on the S/Exchange (s) of: Tokyo, Osaka, Nagoya, Sapporo, Fukuoka
Managements
Takao
Motoyama, ch; Yasuhiko Katoh, pres; Yoshiharu Saito, v pres; Saburo Sakamaki, mgn dir; Yutaka Raijo, mgn dir;
Tamayoshi Iwasaki, mgn dir; Akihiko Nakauchi, mgn dir; Makoto Sakurai, mgn dir; Norio Nagata, mgn dir; Kazuo
Masuyama, dir
Nothing detrimental is known as to the commercial morality
of executives.
Related companies
Modec
Inc, Mitsui Babcock Energy (UK), Mitsui Zosen Plant Engineering, PACECO Corp (USA), Brumeister & Wain
Scandinavian Contractor A/S (Denmark), other
OPERATION
Activities:
Shipbuilding and heavy electrical machinery mfr:
(Sales breakdown by Divisions): Shipbuilding (45.9%), Steel
structure construction (8.1%), Machinery (27.2%), Plants (15.4%), Others
(3.4%).
Products list:
Ships & Oceans: LNG carriers, bulk carriers (grain,
ore, coal, lumber), Oil tankers, FPSO (facility for production, storage and offloading
of crude oil drilled from submarine oil field), Underwater TV vehicles, R-One
robot (autonomous underwater vehicle to search wide underwater area), Techno
super liner, destroyer (equipped with anti-aircraft missile), patrol ship (for
Japan Coast Guard), ship handling simulator, dynamic positioning system
(automatically keep position of ships), other;
Energy systems: marine diesel engines, nuclear fuel
cycles, radioactive waste treatment, cask & containers, diesel generating
plant, gas turbine combined cycle power plants, gas turbine co-generation
system, steam turbine generating system, process compressors, top pressure
recovery turbine (TRT) generating system, natural gas hydrate project;
Environment—Recycling: Mitsui Recycling 21 (thermal dioxin
decomposition system for ash from incinerators), Diobreaker, Mitsui Fluidized
bed waste incinerator, Templar 21 (recycling of kitchen garbage), Expanded
polystyrene recycling system, biogas plant, fluidized bed sludge incinerator,
ultra activated sludge water treatment process;
Plant Engineering: inorganic chemistry plant,
seawater desalination plant;
IT-Related Activities: MapInfo (mapping system for PC
version covering all kinds of map & statistic data), NeoShip (computational
fluid dynamics (CFD) system for ship design);
Logistics Systems: Quayside container crane,
transfer crane in container yard, container terminal management system;
Construction of Social Infrastructure: bridges,
Watergates & penstocks, radar detectors, elementary particle (neutrino)
detectors, floating piers & pontoons;
Advanced Machinery Systems: power electronics equipment, ion
implanter for low-temp poly-silicon TFT, testing system/prober for FPD, CVD-SiC
coating (semiconductor mfg equipment using CVD)
Overseas trading ratio (60.4%): Asia 13.3% (China, Singapore,
Malaysia, Thailand); Europe 15.6%
(UK); Mid/Near East 2.8% (Iran, Bahrain); Latin America 17.6% (Panama, Brazil,
Ba hamas); others 11.1%.
Clients
Mfrs, wholesalers] Mitsubishi Corp, Mitsui & Co,
Sumihiro Co, Imabari Shipbuilding, other.
No. of accounts: 2,00
Domestic areas of activities: Nationwide
Suppliers
[Mfrs, wholesalers] Mitsui & Co, IHI,
Okaya & Co, Mitsubishi Corp, other.
Payment
record: Regular
Location:
Business area in Tokyo. Office premises
at the caption address are owned and maintained satisfactorily.
Bank References
SMBC (H/O)
Mizuho Corporate Bank (H/O)
Relations: Satisfactory
FINANCES: (In Million Yen)
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FINANCES: (Consolidated
in million yen) |
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Terms Ending: |
31/03/2008 |
31/03/2007 |
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INCOME STATEMENT |
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Annual Sales |
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659,215 |
622,800 |
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Cost of Sales |
581,748 |
566,158 |
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GROSS PROFIT |
77,466 |
56,641 |
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Selling & Adm Costs |
41,347 |
35,928 |
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OPERATING PROFIT |
36,118 |
20,712 |
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Non-Operating P/L |
-3,886 |
-2,098 |
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RECURRING PROFIT |
32,232 |
18,614 |
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NET PROFIT |
16,560 |
19,416 |
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BALANCE SHEET |
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Cash |
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53,907 |
77,087 |
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Receivables |
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128,358 |
119,337 |
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Inventory |
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96,366 |
87,978 |
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Securities, Marketable |
6,469 |
422 |
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Other Current Assets |
108,420 |
84,912 |
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TOTAL CURRENT ASSETS |
393,520 |
369,736 |
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Property & Equipment |
192,749 |
192,974 |
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Intangibles |
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16,056 |
18,313 |
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Investments, Other Fixed Assets |
109,220 |
122,413 |
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TOTAL ASSETS |
711,545 |
703,436 |
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Payables |
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153,999 |
140,594 |
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Short-Term Bank Loans |
32,567 |
50,011 |
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Other Current Liabs |
222,893 |
189,915 |
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TOTAL CURRENT LIABS |
409,459 |
380,520 |
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Debentures |
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15,520 |
16,070 |
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Long-Term Bank Loans |
62,969 |
84,462 |
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Reserve for Retirement Allw |
7,476 |
13,912 |
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Other Debts |
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40,479 |
42,648 |
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TOTAL LIABILITIES |
535,903 |
537,612 |
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MINORITY INTERESTS |
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Common
stock |
44,384 |
44,384 |
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Additional
paid-in capital |
18,194 |
18,186 |
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Retained
earnings |
52,331 |
38,695 |
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Evaluation
p/l on investments/securities |
9,415 |
15,902 |
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Others |
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51,884 |
49,019 |
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Treasury
stock, at cost |
(566) |
(362) |
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TOTAL S/HOLDERS` EQUITY |
175,642 |
165,824 |
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TOTAL EQUITIES |
711,545 |
703,436 |
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CONSOLIDATED CASH FLOWS |
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Terms ending: |
31/03/2008 |
31/03/2007 |
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Cash
Flows from Operating Activities |
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48,338 |
67,873 |
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Cash
Flows from Investment Activities |
-18,040 |
-26,986 |
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Cash
Flows from Financing Activities |
-36,960 |
-26,574 |
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Cash,
Bank Deposits at the Term End |
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89,400 |
96,521 |
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ANALYTICAL RATIOS Terms
ending: |
31/03/2008 |
31/03/2007 |
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Net
Worth (S/Holders' Equity) |
175,642 |
165,824 |
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Current
Ratio (%) |
96.11 |
97.17 |
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Net Worth
Ratio (%) |
24.68 |
23.57 |
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Recurring
Profit Ratio (%) |
4.89 |
2.99 |
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Net
Profit Ratio (%) |
2.51 |
3.12 |
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Return
On Equity (%) |
9.43 |
11.71 |
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FOREIGN EXCHANGE
RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.49.46 |
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UK Pound |
1 |
Rs.73.17 |
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Euro |
1 |
Rs.62.96 |
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)