MIRA INFORM REPORT

 

 

Report No. :

336845

Report Date :

21.08.2015

 

IDENTIFICATION DETAILS

 

Name :

IHI CORP

 

 

Registered Office :

Toyosu IHI Bldg, 3-1-1 Toyosu Kotoku Tokyo 135-8710

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

January 1889

 

 

Com. Reg. No.:

(Tokyo-Kotoku) 031604

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Heavy machinery engineering works: Mineral resources & energy (24%) ship building & offshore structures (8%), diesel engines, agricultural machinery, construction machinery, logistic systems, aero engine, rocket systems & space exploration, defense units

 

 

No. of Employees

27,579

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit limit :

Yen 21,839.1 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 – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately  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 an 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. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil 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 impressive - 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 aftereffects 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 four times since 2008. 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 of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) 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 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

 

Company name and address

 

IHI CORP

REGD NAME:   KK I H I 

MAIN OFFICE:  Toyosu IHI Bldg, 3-1-1 Toyosu Kotoku Tokyo 135-8710 JAPAN

                                    Tel: 03-6204-7800     Fax: 03-6204-8800

 

                                    *.. The is its Sagami Factory

 

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

E-Mail address:            webmaster@IHI.co.jp

 

 

ACTIVITIES

 

Engineering works of aerospace, ships/marine structure, industrial machinery, energy-related fields

 

 

BRANCHES   

 

Tokyo (3), Yokohama, Chita, Nagasaki, Aioi, Kure, Soma, other (Tot 18)

 

 

OVERSEAS   

 

Europe (3), USA, Oceania, Asia (9), Middle East, Africa, other (Tot 14)

 

 

FACTORIES

 

Aioi, Kure, Soma, Yokohama, Mizuho, Chita, other (Tot 10)

 

 

CHIEF EXEC 

 

TAMOTSU SAITO, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

MAX CREDIT LIMIT: YEN 21,839.1 MILLION, 30 DAYS NORMAL TERMS.

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 1,304,038 M

PAYMENTSREGULAR   CAPITAL           Yen 107,165 M

      TREND       UP                    WORTH            Yen 362,555 M

STARTED         1889                 EMPLOYES      27,579

 

 

COMMENT    

 

HEAVY ELECTRIC MACHINERY MFR. 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

           

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

1,187,292

51,482

29,764

(%)

253,640

(Consolidated)

31/03/2012

1,221,869

41,715

23,823

2.91

258,475

31/03/2013

1,256,049

36,219

33,386

2.80

299,282

31/03/2014

1,304,038

53,235

33,133

3.82

362,555

31/03/2015

1,440,000

57,000

35,000

10.43

..

                        Unit: In Million Yen

                        Forecast (or estimated) figures for 31/03/2015 fiscal term

 

 

HIGHLIGHTS

 

This is a major comprehensive heavy electric machinery mfr expanding operations in aerospace, ships/marine structures, industrial machinery/energy related fields, other.  Bought aerospace business from the then ailing Nissan Motor in 2000.  Highly competitive in aerospace and defense areas, and other areas, including aircraft jet engines, power generation boilers, LNG tanks, etc.  Tied up with Toshiba Corp in N-power generation equipment.  Integrated shipbuilding business with JFE Holdings.  The company has suspended production of in-house developed heavy duty tanks for LNG transportation in recent years.  But it has started to receive a number of inquiries from ocean-based LNG facilities.  In plant engineering business, it plans to construct natural gas liquefaction facility for the first time in the US.  The company plans to take in shale gas-related demand in North America through a US engineering firm.  Its first LNG liquefaction facility will be completed in the US in 2017.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 1,304,038 million, a 3.8% up from Yen 1,256,049 million in the previous term.  Sales of assigned passenger jet-use parts rose sharply and profitability improved, due to weaker Yen, and became a major driver for a business performance recovery.  The recurring profit was posted at Yen 53,235 million and the net profit at Yen 33,133 million, respectively, compared with Yen 36,219 million recurring profit and Yen 33,386 million net profit, respectively, a year ago

For the current term ending Mar 2015 the recurring profit is projected at Yen 57,000 million and the net profit at Yen 35,000 million, respectively, on a 10.4% rise in turnover, to Yen 1,440,000 million.  Construction works of LNG liquefaction facility in the US will start contributing to earnings.  Sales of automobile-use turbo chargers will continue to expand.   

 

The financial situation is considered maintained FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 21,839.1 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:                       Jan 1889

Regd No.:                                 (Tokyo-Kotoku) 031604

Legal Status:                Limited Company (Kabushiki Kaisha)

Authorized:                  3,300 million shares

Issued:                         1,546,799,542 shares

Sum:                            Yen 107,165 million

 

Major shareholders (%): JTSB (Toshiba Corp) (3.7), Dai-ichi Life Ins (3.6), Japan Trustee Services T (3.6), Master Trust Bank of Japan T (3.1), TCSB (Mizuho Bank) (2.9), Company’s Kyoeikai Assn (1.8), Nippon Life Ins (1.6), Mitsui Sumitomo Ins (1.5), Mizuho Corporate Bank (1.4); foreign owners (31.2)

 

No. of shareholders: 93,702

 

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

 

Managements: Kazuaki Kama, ch; Tamotsu Saito, pres; Fusayoshi Nakamura, v pres; Kazuo Tsukahara, v pres; Joji Sakamoto, dir; Ichiro Terai, dir; Tatsumi Kawaratani dir; Imoto Izumi dir; Toshinori Ishido dir; Hiroshi Iwamoto, dir; Hiromitsu Hamamura, dir

 

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

 

Related companies: IHI Aerospace, IHI Marine United, IHI Europe Ltd, other (Total 257 subsidiaries)

 

 

OPERATION

           

Activities: Heavy machinery engineering works: Mineral resources & energy (24%) ship building & offshore structures (8%), diesel engines, agricultural machinery, construction machinery, logistic systems, aero engine, rocket systems & space exploration, defense units, others (68%)

Overseas Sales Ratio (39%)

 

Clients: [Government agencies, electric powers, mfrs] Defense Agency, Toshiba Corp, Japanese Aero Engine Corp, Tokyo Electric Power, Sumitomo Metal Ind, Japan Nuclear   Fuel, General Electric Co, other.

 No. of accounts: 2,000 -

 Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers]: IHI Finance Support, IHI Plant Construction, IHI Jet Service, IHI Machinery System, IHI Turbo System, other.

 

Payment record: Regular

 

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

 

Bank References:

Mizuho Corporate Bank (H/O)

SMBC (H/O)

Relations: Satisfactory

 

 

FINANCIALS　

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

  Annual Sales

　

1,304,038

1,256,049

  Cost of Sales

1,081,630

1,059,279

      GROSS PROFIT

222,408

196,770

  Selling & Adm Costs

169,137

154,629

      OPERATING PROFIT

53,271

42,141

  Non-Operating P/L

-36

-5,922

      RECURRING PROFIT

53,235

36,219

　

      NET PROFIT

33,133

33,386

BALANCE SHEET

  Cash

　

63,236

73,032

  Receivables

395,037

348,350

  Inventory

355,885

316,303

  Securities, Marketable

1,528

395

  Other Current Assets

85,515

76,706

      TOTAL CURRENT ASSETS

901,201

814,786

  Property & Equipment

336,448

321,057

  Intangibles

42,140

39,143

  Investments, Other Fixed Assets

216,572

189,253

      TOTAL ASSETS

1,496,361

1,364,239

  Payables

280,900

266,299

  Short-Term Bank Loans

110,340

114,927

　

　

　

  Other Current Liabs

335,009

284,226

      TOTAL CURRENT LIABS

726,249

665,452

  Debentures

30,000

63,335

  Long-Term Bank Loans

165,143

151,449

  Reserve for Retirement Allw

129,893

115,408

  Other Debts

　

82,521

69,313

      TOTAL LIABILITIES

1,133,806

1,064,957

      MINORITY INTERESTS

Common stock

107,165

95,762

Additional paid-in capital

54,439

43,047

Retained earnings

171,318

144,675

Evaluation p/l on investments/securities

8,424

6,158

Others

21,874

10,376

Treasury stock, at cost

(665)

(736)

      TOTAL S/HOLDERS` EQUITY

362,555

299,282

　

      TOTAL EQUITIES

1,496,361

1,364,239

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2014

31/03/2013

Cash Flows from Operating Activities

　

39,220

74,347

Cash Flows from Investment Activities

-62,282

-61,033

Cash Flows from Financing Activities

11,395

-3,150

　

Cash, Bank Deposits at the Term End

　

62,604

72,070

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

Net Worth (S/Holders' Equity)

362,555

299,282

Current Ratio (%)

124.09

122.44

Net Worth Ratio (%)

24.23

21.94

Recurring Profit Ratio (%)

4.08

2.88

Net Profit Ratio (%)

2.54

2.66

Return On Equity (%)

9.14

11.16

 

           

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.65.23

UK Pound

1

Rs.102.21

Euro

1

Rs.72.57

 

 

INFORMATION DETAILS

 

Report Prepared by :

ANK

 

               

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%)

 

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