MIRA INFORM REPORT

 

 

Report Date :

16.02.2011

 

IDENTIFICATION DETAILS

 

Name :

HITACHI ZOSEN CORPORATION

 

 

Registered Office :

1-7-89 Nanko-Kita Suminoeku Osaka 559-8559

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

May 1934

 

 

Com. Reg. No.:

(Osaka-Suminoeku) 031541       

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Heavy machinery & engineering company

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

Yen 5,133.4 Million

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

-----

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – June 30, 2010

 

Country Name

Previous Rating

                   (01.04.2010)                  

Current Rating

(30.06.2010)

Japan

a1

a1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

Company name

 

HITACHI ZOSEN CORPORATION

 

 

REGD NAME 

 

Hitachi Zosen KK

 

 

MAIN OFFICE

 

1-7-89 Nanko-Kita Suminoeku Osaka 559-8559 JAPAN

Tel: 06-6569-0001     Fax: 06-6569-0002

URL:                 http://www.hitachizosen.co.jp/

E-Mail address:            webadmin@hitachizosen.co.jp (general affairs)

 

 

ACTIVITIES  

 

Heavy machinery & engineering company

 

 

BRANCHES   

 

Tokyo, Sapporo, Sendai, Nagoya, Niigata, Hiroshima, Takamatsu, Fukuoka

 

 

OVERSEAS   

 

London, New York, Shanghai, Beijing, Taipei, Bangkok, Ho Chi Minh, Pusan

 

 

FACTORIES

 

Maizuru, Innoshima, Mukaishima, Sakai, Kanagawa, Ariake (machinery), Ibaraki

 

CHIEF EXEC 

 

MINORU FURUKAWA, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES                    FAIR                             A/SALES          Yen 273,526 M

PAYMENTS      REGULAR                     CAPITAL           Yen 45,442 M

TREND             SLOW                          WORTH            Yen 93,199 M

STARTED                     1934                             EMPLOYES      8,237

 

 

COMMENT

 

HEAVY MACHINERY & ENGINEERING FIRM. 

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

MAX CREDIT LIMIT: YEN 5,133.4 MILLION, ON NORMAL 30 DAYS TERMS.

 

                        Forecast (or estimated) figures for 31/03/2011 fiscal term

 

 

HIGHLIGHTS

 

This is one of the major heavy machinery and engineering firm with environmental-related equipment including incinerators as mainline.  Originally started shipbuilding as mainline but in fall 2002 integrated the division with that of former NKK Corp.  More emphasis placed on energy, electronics, information systems and machinery.  The main environmental equipment business is struggling due to budget cuts at local municipalities.  Putting efforts into water treatment and other new fields.  Shipbuilding operations remained depressed among international competition.  In Feb 2006, transferred 33% equity stake of a subsidiary, Naikai Zosen Corp, shipbuilder of specialty ships, Hiroshima, to Tokyo-based investment firm, Kaleido Holdings Inc.  This is part of restructuring efforts aimed at focusing on the environmental protection business.  Following shipbuilding depression, the firm is placing more emphasis on energy, electronics, information systems and machinery.  Separated shipbuilding operations in 2004 as aforesaid.  The firm won the first order from India for shield drilling machines for subway construction works.  It is studying acquisition of Unitika’s environment business.   

 

(Recent news from the Nikkei.com):

 

Dated 15/12/2010: Hitachi Zosen plans to increase production of large shield tunneling machines in anticipation of growing orders in Asia, the US and other overseas markets.  A joint venture between Maeda Corp and a Hong Kong firm recently ordered a shield tunneling machines to be used in construction a high-speed rail line connecting Hong Kong and Guangzhou in China.  In conjunction with this, Hitachi Zosen has installed a production line for the machines at its Ariake works for an undisclosed cost.

 

Dated 29/01/2011: Hitachi Zosen will invest about Yen 30 billion of its own funds to acquire environment- and machinery-related operations over three years starting in fiscal 2011.  The investmens will target companies and segments that will likely generate synergies with Hitachi Zosen’s businesses in waste incineration, water treatment and other environmental field, as well as functional film production equipment and other machinery.  The criteria include firms that will likely help expand markets, increase customers or enhance cost competitiveness. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2010 fiscal term amounted to Yen 273,526 million, an 8.4% down from Yen 298,605 million in the previous term.  Sales declined affected by the global economic downturn.  Yen’s hike hurt exports revenues & profits in Yen terms.  By Divisions, Environment & Plants down 4.4% to 115,441 million, as corporate investments were down;  Machinery & Processing Equipment down 14.5% to 93,401 million;  Steel Structure & Construction Machinery up 5.9% to Yen 31,883 million, as restructuring of the operations contributed.  The recurring profit was posted at Yen 16,067 million and the net profit at Yen 7,906 million, respectively, compared with Yen 8,990 million recurring profit and Yen 1,449 million net profit, respectively, a year ago. 

 

(Apr/Dec/2010 results): Sales Yen 189,986 million (up 4.8%), operating profit Yen 7,184 million (down 6.1%), recurring profit Yen 8,719 million (down 14.3%), net profit Yen 8,309 million (down 10%).  (% compared with the corresponding period a year ago)

 

For the current term ending Mar 2011 the recurring profit is projected at Yen 12,000 million and net profit at Yen 9,000 million, respectively, on a 9.7% rise in turnover, to Yen 300,000 million.  Environment-related facilities are backed by an order backlog and large-scale orders are in hand for precision machinery works.  But industrial plant works are below the breakeven level.  The mainstay profit-earner process equipment is under escalated competition.  Operating profit will suffer a setback.

 

The financial situation is considered maintained FAIR and should be good for ORDINARY business engagements.  Max credit limit is estimated at Yen 5,133.4 million, on normal 30 days terms.

 

 

REGISTRATION

 

Date Registered:          May 1934

Regd No.:                     (Osaka-Suminoeku) 031541

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                  2,000 million shares

Issued:                         796,073,282 shares

Sum:                            Yen 45,442 million

           

Major shareholders (%): Japan Trustee Services T (4.6), Citibank (HK) PBG Client HK (3.8), Master Trust Bank of Japan T (3.6), MUFG (3.1), Japan Trustee Services t9 (2.9), Trust & Custody Services Ann (2.4), Sompo Japan Ins (1.4), Juniper (1.2), Nippon Life Ins (1.0), Japan Trustee Services T1 (0.7); foreign owners (11.5)

 

No. of shareholders: 104,555

 

Listed on the S/Exchange (s) of: Tokyo, Osaka

 

Managements: Minoru Furukawa, pres; Shunsaku Yahata, ch; Koichiro Anzai, v pres; Akifumi Mitani, mgn dir; Hisao Matsuwake, mgn dir; Seiichiro Tsurisaki, mgn dir; Toru Shimizu, dir; Takashi Tanisho, dir; Kenji Sawada, dir; Masayuki Morikata, dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Ataka Kogyo, Nichizo Tech, other

           

 

OPERATION

 

Activities: Heavy machinery & engineering works:

 

(Sales breakdown by divisions):

 

Environmental equipment & plants (42%): environmental protection systems, desalination & potabilization plants, AOM and long-term business, chemical plants & NOX removal system, sewage & human waste-processing systems, industrial water-processing systems, biomass-utilization system, environmental restoration business,

 

Machinery & Processing Equipment (34%): marine diesel engines, process equipment, press machines, nuclear equipment, power generation facilities & business, boilers, plastic machinery, food packaging & medical machineries, electronics control business, removing foreign matter system, OLED production systems, vacuum valves, electrochemical buffing, other

 

Steel Structure & Construction Machinery (12%): shield tunneling machines & construction machines, bridges, steel segments for tunnel lining, hydraulic gates, steel stacks, marine civil engineering, other

 

Others (12%): GPS comprehensive oceanographic monitoring system, electric discharge impulse crushing system, GPs displacement observation system, remote monitoring system, slurry ice plants, GPS continuous monitoring system, digital broadcast related equipment, NetSurv G6 high precision GPS receiver, deck machinery for ships, trace catcher on-site position management system, other

 

(Overseas sales ratio 15.6%: Asia 9.3%, Latin America 0.4%, Europe 0.4%, other 5.5%

 

Clients: Mfrs, wholesalers, general trading houses, other

            No. of accounts: 2,000

            Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Mitsui & Co, Marubeni Corp, Mitsubishi Corp, Sojitz Marine & Engineering, JFE Shoji Trading Corp, Sumitomo Corp, Murata Machinery Corp, Metal One, Marubeni-Itochu Steel Inc, Nihon Sekiyu Hambai, other.

 

Payment record: Regular

 

Location: Business area in Osaka.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

MUFG (Osaka)

Mizuho Corporate Bank (Osaka)

Relations: Satisfactory

 

 

FINANCIALS

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2010

31/03/2009

INCOME STATEMENT

 

 

 

  Annual Sales

　

273,526

298,605

 

  Cost of Sales

230,895

255,554

 

      GROSS PROFIT

42,630

43,050

 

  Selling & Adm Costs

29,073

31,372

 

      OPERATING PROFIT

13,556

11,678

 

  Non-Operating P/L

2,511

-2,688

 

      RECURRING PROFIT

16,067

8,990

　

      NET PROFIT

7,906

1,448

BALANCE SHEET

 

 

 

 

  Cash

　

55,826

51,306

 

  Receivables

 

91,590

96,584

 

  Inventory

 

32,823

46,431

 

  Securities, Marketable

43

86

 

  Other Current Assets

10,719

17,806

 

      TOTAL CURRENT ASSETS

191,001

212,213

 

  Property & Equipment

132,090

133,276

 

  Intangibles

 

1,643

1,622

 

  Investments, Other Fixed Assets

24,596

20,361

 

      TOTAL ASSETS

349,330

367,472

 

  Payables

 

53,121

71,765

 

  Short-Term Bank Loans

28,566

28,798

 

　

 

　

　

 

  Other Current Liabs

94,283

96,641

 

      TOTAL CURRENT LIABS

175,970

197,204

 

  Debentures

 

15,557

32,971

 

  Long-Term Bank Loans

53,462

40,747

 

  Reserve for Retirement Allw

7,431

6,942

 

  Other Debts

　

3,711

3,765

 

      TOTAL LIABILITIES

256,131

281,629

 

      MINORITY INTERESTS

 

 

 

Common stock

45,442

45,442

 

Additional paid-in capital

5,973

5,973

 

Retained earnings

28,587

20,708

 

Evaluation p/l on investments/securities

(90)

(376)

 

Others

 

13,554

14,282

 

Treasury stock, at cost

(267)

(186)

 

      TOTAL S/HOLDERS` EQUITY

93,199

85,843

　

      TOTAL EQUITIES

349,330

367,472

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2010

31/03/2009

 

Cash Flows from Operating Activities

　

5,508

2,347

 

Cash Flows from Investment Activities

-12,658

-7,492

 

Cash Flows from Financing Activities

8,755

1,169

　

Cash, Bank Deposits at the Term End

　

51,689

50,094

ANALYTICAL RATIOS            Terms ending:

31/03/2010

31/03/2009

 

 

Net Worth (S/Holders' Equity)

93,199

85,843

 

 

Current Ratio (%)

108.54

107.61

 

 

Net Worth Ratio (%)

26.68

23.36

 

 

Recurring Profit Ratio (%)

5.87

3.01

 

 

Net Profit Ratio (%)

2.89

0.48

 

 

Return On Equity (%)

8.48

1.69

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.45.50

UK Pound

1

Rs.73.07

Euro

1

Rs.61.63

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

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

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

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

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

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

 

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%)

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.