MIRA INFORM REPORT

 

 

Report No. :

343046

Report Date :

28.09.2015

 

IDENTIFICATION DETAILS

 

Name :

JAPAN DRILLING CO LTD

 

 

Registered Office :

Shin-Horidome Bldg 2F/5F/6F, 2-4-3 Nihombashi-Horidomecho Chuoku Tokyo 103-0012

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015 (Consolidated)

 

 

Date of Incorporation :

April 1968

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Subject is engaged in Offshore drilling (84%), drilling service and operation (13%), others (3%)

 

 

No. of Employee :

372

 

 

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 1,230.2 Million

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but correct

 

 

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

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

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 inefficientINVESTMENT 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

 

JAPAN DRILLING CO LTD

 

REGD NAME:               Nihon Kaiyo Kussaku KK

MAIN OFFICE:              Shin-Horidome Bldg 2F/5F/6F, 2-4-3 Nihombashi-Horidomecho Chuoku Tokyo                                                                                               103-0012 JAPAN

                                                Tel: 03-5847-5850     Fax: 03-5644-5701     -

 

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

E-Mail address:             (thru the URL)

 

 

ACTIVITIES

 

Drilling offshore oil & natural gas fields

 

 

BRANCHES

 

Nil

 

 

OVERSEAS

 

Panama, USA, Netherlands, Malaysia, Indonesia, Iran (--subsidiaries)

 

 

CHIEF EXEC

 

YUICHIRO ISHIKAWA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY

 

FINANCES        FAIR                                         A/SALES          Yen 32,584 M

PAYMENTS      SLOW BUT CORRECT               CAPITAL           Yen 7,572 M

TREND             SLOW                                       WORTH             Yen 62,238 M

STARTED         1968                                         EMPLOYES      372

 

COMMENT

 

OIL DRILLING COMPANY

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 1,230.2 MILLION, 30 DAYS NORMAL TERMS

 

 

Unit: In Million Yen

Forecast figures for the 31/03/2016 fiscal term.

 

 

HIGHLIGHTS

 

This is the sole company in Japan involved in drilling offshore oil & natural gas fields and sinking wells, mainly in S/E Asia, Middle East and other areas.  Semi-major company in world with sub carrying on sales of undersea well-sinking apparatus (rig).  Earnings come from daily income received from operations of rigs.  .The company is also providing operation and management services for exploration ship “Chikyu” to Japan Agency for Maritime-Earth Science and Technology thru its JV. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 32,584 million, an 18.8% down from Yen 32,584 million in the previous term.  Long-term maintenance works for 3 large drilling rigs negatively affected earnings.  Day rate decreased, hit by sharp drop in crude oil prices.   The recurring profit was posted at Yen 3,260 million and the net profit at Yen 1,892 million, respectively, compared with Yen 12,281 million recurring profit and Yen 6,106 million net profit, respectively, a year ago.

 

(Apr/Jun/2015 results): Sales Yen 15,364 million (up 89.5%), operating profit Yen 2,948 million (up 249.7%), recurring profit Yen 3,169 million (up 72.9%), net profit Yen 2,165 million (up 28.9%).  (% as compared with the corresponding period a year ago).

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 436 million and the net profit at Yen 169 million, respectively, on a 24.3% rise in turnover, to Yen 40,507 million.  The number of drilling rigs will increase from 7 to 8.  Repair costs are likely to decrease sharply.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 1,230.2 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　                   Apr 1968

Legal Status:                Limited Company (Kabushiki Kaisha

Authorized:                               60 million shares

Issued:                         18 million shares

Sum:                            Yen 7,572 million

 

Major shareholders (%): Japan Petroleum Exploration (30.9), Mitsubishi Materials (21.0), Inpex Corp (6.4), Japan Marine United (3.1), Mitsui Eng. & Shipbuilding (2.0), Macquarie Bank Ltd. MBL London (1.7), TMEIC (1.3), Daiichi Jitsugyo (1.1), Mitsui Co (1.0), Tokio Marine & Nichido Fire Ins (0.8); foreign owners (3.1)

 

No. of shareholders: 12,101

 

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

 

Managements: Yuichiro Ichikawa, pres; Hironori Imazato, v pres; Kenzo Yamada, s/mgn dir; Michiharu Ureshino, s/mgn dir; Toshio Harada, mgn dir; Yoichi Onoe, mgn dir; Yasuro Yasui, dir; Takanori Hioki, dir

 

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

 

Related companies: Mantle Quest Japan Co, Pars Drilling Kish, other.

 

 

OPERATION

           

Activities: Offshore drilling (84%), drilling service and operation (13%), others (3%)

Overseas Sales Ratio (76%)

           

Clients: [Mfrs, wholesalers] Japan Petroleum Exploration Co, Saga Drill 2, UMW JDC Drilling, NEC Corp, other 

No. of accounts: 300

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Daiichi Jitsugyo, NOV Rig Solutions, Shinwa Co, other

 

Payment record: Slow but Correct

 

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

           

Bank References:

MUFG (H/O)

SMBC (Hibiya)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

32,584

40,134

　

  Cost of Sales

27,492

26,652

　

      GROSS PROFIT

5,092

13,481

　

  Selling & Adm Costs

4,249

3,571

　

      OPERATING PROFIT

842

9,910

　

  Non-Operating P/L

2,418

2,371

　

      RECURRING PROFIT

3,260

12,281

　

      NET PROFIT

1,892

6,106

BALANCE SHEET

　

　

  Cash

　

25,949

20,635

　

  Receivables

12,349

9,936

　

  Inventory

4,715

3,357

　

  Securities, Marketable

10,411

　

　

  Other Current Assets

9,033

7,108

　

      TOTAL CURRENT ASSETS

62,457

41,036

　

  Property & Equipment

47,051

43,198

　

  Intangibles

277

239

　

  Investments, Other Fixed Assets

6,117

19,963

　

      TOTAL ASSETS

115,902

104,436

　

  Payables

812

846

　

  Short-Term Bank Loans

3,823

4,907

　

　

　

　

　

  Other Current Liabs

15,611

14,104

　

      TOTAL CURRENT LIABS

20,246

19,857

　

  Debentures

8,733

4,487

　

  Long-Term Bank Loans

24,517

21,066

　

  Reserve for Retirement Allw

　

　

　

  Other Debts

　

167

215

　

      TOTAL LIABILITIES

53,663

45,625

　

      MINORITY INTERESTS

　

　

Common stock

7,572

7,572

　

Additional paid-in capital

3,572

3,572

　

Retained earnings

45,117

43,674

　

Evaluation p/l on investments/securities

5,269

3,289

　

Others

708

703

　

Treasury stock, at cost

0

0

　

      TOTAL S/HOLDERS` EQUITY

62,238

58,810

　

      TOTAL EQUITIES

115,902

104,436

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

1,511

7,556

　

Cash Flows from Investment Activities

3,669

-9,998

　

Cash Flows from Financing Activities

3,113

6,221

　

Cash, Bank Deposits at the Term End

　

32,723

20,607

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

62,238

58,810

　

Current Ratio (%)

308.49

206.66

　

Net Worth Ratio (%)

53.70

56.31

　

Recurring Profit Ratio (%)

10.00

30.60

　

Net Profit Ratio (%)

5.81

15.21

　

　

Return On Equity (%)

3.04

10.38

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.66.10

UK Pound

1

Rs.100.89

Euro

1

Rs.73.96

 

 

INFORMATION DETAILS

 

Analysis Done by :

TRI

 

 

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%)

 

 

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.