Budgeting and Project Delays in Domestic and Overseas Water-Related Projects

「For government agencies, the large-scale water treatment plant equipment upgrade project ordered in the previous consolidated fiscal year progressed as scheduled.」

「In the water treatment field, many projects ordered from government agencies and private-sector companies reached their delivery or construction deadlines during the consolidated accounting period for the third quarter, contributing to increases in revenue and profit.」

「In overseas sales, because the impact of COVID-19 has prevented us from traveling from Japan to local markets and conducting sales activities, we have been developing and materializing projects from our subsidiary NAGAOKA VIETNAM CO., LTD. in Vietnam and using a local distributor in Malaysia. However, local activity restrictions imposed in response to COVID-19 prevented active sales activities in those markets as well, and difficult conditions continued.」

「In overseas sales, we are developing and materializing projects from our subsidiary NAGAOKA VIETNAM CO., LTD. in Vietnam and using a local distributor in Malaysia, but difficult conditions continue.」

「In overseas sales, we remain unable to travel from Japan to local markets and conduct sales activities. Although we are developing and materializing projects from our subsidiary NAGAOKA VIETNAM CO., LTD. in Vietnam and using a local distributor in Malaysia, difficult conditions continue.」

「In overseas sales, we remain unable to travel from Japan to local markets and conduct sales activities. Although we are developing and materializing projects from our subsidiary NAGAOKA VIETNAM CO., LTD. in Vietnam and using a local distributor in Malaysia, difficult conditions continue.」

「Although the company remains unable to travel from Japan to conduct overseas sales activities because of the impact of COVID-19, it is developing and turning projects into concrete opportunities by using its subsidiary, NAGAOKA VIETNAM CO., LTD., as a base in Vietnam and local distributors in Malaysia.」

「Overseas, the situation in which we are unable to travel to local markets and conduct sales activities due to the impact of COVID-19 continues.」

「Overseas, the situation in which we are unable to travel to local markets and conduct sales activities continues, and we remain unable to develop new projects.」

「Revenue was ¥843.060 million, up 2.5% year on year, while the segment posted a loss of ¥95.340 million, compared with a segment loss of ¥58.196 million in the previous fiscal year.」

「However, several planned projects are taking time for demonstration testing, specification reviews and other processes. In the water intake field, some projects are experiencing delays in government budget measures and construction plans compared with our expectations, and order intake was lower than in the previous year.」

「We have continued to focus on developing and materializing projects and are building a track record, including the decision to adopt Airsis for a domestic water treatment plant, the decision to adopt our technologies and products throughout the process from water intake facilities to water treatment facilities at a water treatment plant in Malaysia, and the decision to adopt Klemis at a water treatment plant in Vietnam. However, several planned projects are taking time for demonstration testing, specification reviews and other processes.」

「Several planned projects are taking time for demonstration testing, specification reviews and other processes.」

「However, because the schedules and delivery periods for projects already ordered fell in or after the consolidated accounting period for the second quarter, revenue was ¥146.185 million, down 49.2% year on year, and the segment posted a loss of ¥39.210 million, compared with segment profit of ¥56.115 million in the same period of the previous year.」

「Overseas, we are cautiously advancing the materialization of projects after narrowing our focus to regions where we have an installation track record or have received inquiries. Although our products have been selected for some projects, other projects have been postponed or cancelled due to groundwater regulations and other factors, so we are proceeding while assessing local conditions.」

「In the domestic water-related business, in addition to our traditional sales activities targeting government agencies, we are conducting sales activities for infrastructure construction projects and the linen industry. In the overseas water-related business, we are narrowing our sales efforts to regions where we have an installation track record or have received inquiries, but orders have remained sluggish due to delays in receiving orders for planned projects and lost orders.」

「In Japan, we captured demand for upgrades to existing water intake facilities and infrastructure construction projects ahead of the Tokyo Olympics. However, because some projects for which we had planned to receive orders are taking time to finalize product specifications, the expected timing of revenue recognition has been delayed.」

「Although there is demand for water treatment facilities in overseas water-related businesses, these projects are susceptible to political and economic developments, and their formulation into concrete projects is taking time.」

「In the water-related business, overseas water projects for which we had expected to receive orders did not progress, and we temporarily reviewed efforts to develop overseas projects from the perspective of making effective use of management resources.」

「In the water-related business, projects overseas for which we had expected to receive orders did not progress, while construction on projects already ordered in Japan was delayed, and consequently the business was unable to make a significant contribution to revenue.」

「Overseas, there is demand for new capital investment in China and Southeast Asia, but financing issues, economic slowdown and political developments are affecting project progress.」

「Although solid demand exists for upgrades to equipment owned by domestic water utilities, there has also been a noticeable tendency to prioritize replacement of aging pipelines and the earthquake resistance of facilities, among other measures. As a result, we were partly affected by reduced budget allocations and delays in budgeting for upgrades to water intake facilities, an area of our group's business.」