Recognition of provision for doubtful accounts (selling, general and administrative expenses)
NAGAOKA INTERNATIONAL CORPORATION (the Company)
STEP project, an order received from Petrofac HQC IJV LLC, for which the Company's Energy Business Division is responsible for EPC
Manufacturing progress was suspended after financial issues at Petrofac came to light. The outlook for restarting manufacturing and collecting payment also remains uncertain.
Allowance for doubtful accounts expense of ¥196 million (selling, general and administrative expenses). The contract assets subject to the allowance amount to ¥393 million.
Consolidated financial results for the fiscal year ending June 2026 (1 July 2025 to 30 June 2026)
The above allowance for doubtful accounts expense has been reflected in the Summary of Financial Results for the Fiscal Year Ending June 2026 released today.
Contract assets of ¥393 million (Petrofac HQC IJV LLC, hereinafter the JV)
Related procedures
Negotiations between SONATRACH and the JV toward performance of the contract are continuing
Company response
Manufacturing progress for the STEP project
The Company will carefully monitor developments in the negotiations between SONATRACH and the JV toward performance of the contract and take the necessary measures as appropriate. If any matter requiring disclosure arises due to future changes in circumstances, the Company will promptly disclose it.
| Item | Details |
|---|---|
| Event name | Recognition of provision for doubtful accounts (selling, general and administrative expenses) |
| Subject Entity | NAGAOKA INTERNATIONAL CORPORATION (the Company) |
| Target Locations / Products | STEP project, an order received from Petrofac HQC IJV LLC, for which the Company's Energy Business Division is responsible for EPC |
| Cause | Manufacturing progress was suspended after financial issues at Petrofac came to light. The outlook for restarting manufacturing and collecting payment also remains uncertain. |
| Amount of Impact on Business Performance | Allowance for doubtful accounts expense of ¥196 million (selling, general and administrative expenses). The contract assets subject to the allowance amount to ¥393 million. |
| Accounting period in which recognized | Consolidated financial results for the fiscal year ending June 2026 (1 July 2025 to 30 June 2026) |
| Impact on Earnings Forecast | The above allowance for doubtful accounts expense has been reflected in the Summary of Financial Results for the Fiscal Year Ending June 2026 released today. |
| Type of litigation or proceeding | Negotiations between SONATRACH and the JV toward performance of the contract are continuing |
| Amount of receivables at risk of non-collection or delayed collection | Contract assets of ¥393 million (Petrofac HQC IJV LLC, hereinafter the JV) |
| Suspended operations | Manufacturing progress for the STEP project |
| Outlook | The Company will carefully monitor developments in the negotiations between SONATRACH and the JV toward performance of the contract and take the necessary measures as appropriate. If any matter requiring disclosure arises due to future changes in circumstances, the Company will promptly disclose it. |
| Planned follow-up disclosure | If any matter requiring disclosure arises due to future changes in circumstances, the Company will promptly disclose it. |
Items this document does not state (13)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.Manufacturing progress has been suspended due to financial issues at Petrofac, leaving the timing and conditions for restarting manufacturing and the outlook for collecting payment uncertain.