MIRA INFORM REPORT

 

 

Report Date :

17.09.2014

 

IDENTIFICATION DETAILS

 

Name :

HITACHI ZOSEN CORPORATION

 

 

Registered Office :

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

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

May 1934

 

 

Com. Reg. No.:

1200-01-031541

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Subject is engaged in Heavy machinery & engineering works:

 

·         Environmental Equipment & Plants (62%)

·         Machinery & Processing Equipment (21%)

·         Infrastructure (8%)

·         Precision Machinery (7%)

·         Others (3%)

 

 

No of Employees :

9,171

 

 

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 7,314.2 Million

Status :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

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 01, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

 

D

 

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

 

Source : CIA

Company Name & address

 

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, Fukuoka, other (Tot 13)

OVERSEAS:     China, Abu Dhabi, USA, India, Myanmar, Singapore, Indonesia, Taiwan,

Bangkok, Vietnam, other

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

 

CHIEF EXEC:    TAKASHI TANISHO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY:       FINANCES        FAIR                 A/SALES          Yen 333,433 M

                        PAYMENTS      REGULAR         CAPITAL           Yen 45,442 M

                        TREND             UP                    WORTH            Yen 117,564 M

                        STARTED         1934                 EMPLOYES      9,171

 

COMMENT:       HEAVY MACHINERY & ENGINEERING COMPANY. FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

                        MAX CREDIT LIMIT: YEN 7,314.2 MILLION, ON 30 DAYS NORMAL TERMS.

 

 

 

 

 

Notes: Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2015 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.  Following the shipbuilding depression, placing more emphasis on energy, electronics, information systems and marine equipment.  Separated shipbuilding operations in 2004.   

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 333,433 million, a 12.3% up from Yen 296,792 million in the previous term.  The recurring profit was posted at Yen 6,220 million and the net profit at Yen 3,719 million, respectively, compared with Yen 11,246 million recurring profit and Yen 7,410 million net profit, respectively, a year ago. 

 

(Apr/Jun/2014 results): Sales Yen 65,234 million (up 12.1%), operating loss Yen 4,260 million (previously Yen 4,624 million loss), recurring loss Yen 4,349 million (previously Yen 4,899 million loss), net loss Yen 1,679 million (previously Yen 4,395 million loss).  (% & figures as compared with the corresponding period a year ago)

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 8,000 million and net profit at Yen 4,000 million, respectively, on a 4.0% fall in turnover, to Yen 320,000 million. 

 

The financial situation is considered maintained FAIR and should be good for ORDINARY business engagements.  Max credit limit is estimated at Yen 7,314.2 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:          May 1934

Regd No.:                     1200-01-031541 (Osaka-Suminoeku)

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                  400 million shares

Issued:                         159,214,656 shares

Sum:                            Yen 45,442 million

           

Major shareholders (%): Master Trust Bank of Japan T (7.2), Japan Trustee Services T (5.3), MUFG (3.1), Evergreen (2.3), Company’s Treasury Stock (1.7), Japan Trustee Services T1 (1.5), BNP Paribas Securities (1.4), Japan Trustee Services T6 (1.3), Sompo Japan Insurance (1.2); foreign owners (16.9)

 

No. of shareholders: 83,761

 

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

 

Managements: Minoru Furukawa, ch; Takashi Tanisho, pres; Madski Hsdhikses, v ch; Hisao Matsuwake, v pres; Masayuki Morikata, mgn dir; Koji Abo, mgn dir; Toru Yoshioka, mgn dir; Toru Shimizu, mgn dir; Wataru Kobashi, mgn dir; Chiaki Ito, dir

 

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

 

Related companies: Daiki Ataka Engineering, Nichizo Tech, H&F, other

 

 

OPERATION

 

Activities: Heavy machinery & engineering works:

 

(Sales breakdown by divisions):

 

Environmental equipment & plants (62%): 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 (21%): 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

 

Infrastructure (8%): bridge maintenance & earthquake protection, shield tunneling machines, hydraulic gates, GPS remote monitoring system, electric discharge impulse crushing system, marine civil engineering, steel stacks, slurry ice plants;

 

Precision Machinery (7%): plastic machines, food filling & packaging systems, vacuum valve & rupture disc, polishing machines, conveyance & handling systems, electronic boards & units, other;

 

Others (3%)

Overseas sales ratio (35%)

 

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, 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 Bank (Osaka)

Relations: Satisfactory

 

FINANCES (In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

333,433

296,792

　

  Cost of Sales

283,260

246,046

　

      GROSS PROFIT

50,173

50,745

　

  Selling & Adm Costs

42,294

39,383

　

      OPERATING PROFIT

7,878

11,362

　

  Non-Operating P/L

-1,658

-116

　

      RECURRING PROFIT

6,220

11,246

　

      NET PROFIT

3,719

7,410

BALANCE SHEET

 

 

　

　

  Cash

　

54,462

59,249

　

  Receivables

 

122,337

107,833

　

  Inventory

 

21,154

19,336

　

  Securities, Marketable

51

45

　

  Other Current Assets

17,668

14,774

　

      TOTAL CURRENT ASSETS

215,672

201,237

　

  Property & Equipment

122,031

123,472

　

  Intangibles

 

7,287

6,982

　

  Investments, Other Fixed Assets

34,424

34,655

　

      TOTAL ASSETS

379,414

366,346

　

  Payables

 

44,840

52,499

　

  Short-Term Bank Loans

32,933

36,523

　

　

 

　

　

　

  Other Current Liabs

95,692

82,048

　

      TOTAL CURRENT LIABS

173,465

171,070

　

  Debentures

 

10,000

10,000

　

  Long-Term Bank Loans

60,560

55,500

　

  Reserve for Retirement Allw

12,134

9,829

　

  Other Debts

　

5,690

4,822

　

      TOTAL LIABILITIES

261,849

251,221

　

      MINORITY INTERESTS

 

　

　

Common stock

45,442

45,442

　

Additional paid-in capital

5,973

5,973

　

Retained earnings

50,466

48,314

　

Evaluation p/l on investments/securities

416

292

　

Others

 

17,261

16,902

　

Treasury stock, at cost

(1,994)

(1,798)

　

      TOTAL S/HOLDERS` EQUITY

117,564

115,125

　

      TOTAL EQUITIES

379,414

366,346

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

299

9,648

　

Cash Flows from Investment Activities

-9,897

-23,487

　

Cash Flows from Financing Activities

-513

-7,818

　

Cash, Bank Deposits at the Term End

　

49,961

56,413

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

117,564

115,125

　

 

Current Ratio (%)

124.33

117.63

　

 

Net Worth Ratio (%)

30.99

31.43

　

 

Recurring Profit Ratio (%)

1.87

3.79

　

 

Net Profit Ratio (%)

1.12

2.50

　

　

Return On Equity (%)

3.16

6.44

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.10

UK Pound

1

Rs.99.05

Euro

1

Rs.79.03

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

TPT

 

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

--

NB

                                       New Business

 

--

 

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.