Deterioration in Profitability, Arbitration, and Contractual Consideration Recovery Risk in a Gas-Fired Power Generation Project for Brazil
First written in FY2026. 4 of 6 entries say "Materialised", first in 2026-05-14. Latest entry: 2026-08-07.
Toyo Engineering moved to the "Worse" side of this theme in 2026, 10 years after the typical company in this theme (2016).
3 other companies' latest entry also says "Mitigated".
- 2026-08-07MitigatedEarnings presentation
「The Brazilian power project is in the final stage of commissioning, with completion scheduled for August 2026. The impact on earnings for the current fiscal year is limited.」
The Brazilian gas-fired power project entered the final stage of commissioning, and its impact on current-year earnings was described as limited. The stated August 2026 completion schedule suggests that the risk is nearing resolution, but completion has not yet been confirmed. - FY2026MaterialisedAnnual report
「For the Brazilian gas-fired power project, we continued discussions with the customer regarding revisions to the contract consideration and the construction schedule, among other matters, but ultimately failed to reach an agreement, and the Group commenced arbitration in July 2025. Meanwhile, the customer asserted that liquidated damages for the construction delay should apply and, having also stopped payments from October 2025 for services already performed by the Group, accumulated amounts withheld from payment by the customer.」
Discussions with the customer on the contract price and construction schedule for the gas-fired power generation project for Brazil ended unsuccessfully, leading to an arbitration filing in July 2025. From October of the same year, the customer stopped payments and withheld amounts accumulated. Additional recognition of losses on construction resulted in a specific impact on the current fiscal year's results, including an operating loss of ¥19 billion.