Increase in construction costs for US LNG project
First written in FY2018-Q2. 9 of 17 entries say "Mitigated", first in FY2020-Q1. Latest entry: FY2026.
Chiyoda moved to the "Worse" side of this theme in 2017.
1 other company's latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「During the current consolidated fiscal year, we reversed most of the provision.」
Following the finalization of the contract amendment and allocation of responsibility for the GPX project, most of the ¥28,379 million provision for construction losses recognized at the end of the previous fiscal year was reversed, improving project profitability. - FY2026-H1MitigatedAnnual report
「Amid negotiations to amend the EPC contract for Trains 2 and 3, we reached a basic agreement with GPX in June on the allocation of responsibility for future cost burdens, including settlement of costs to be incurred in executing the project going forward. We are currently in the final stage ahead of signing the contract.」
For Trains 2 and 3 of Golden Pass LNG, a basic agreement was reached with GPX on the allocation of responsibility for future cost burdens, and the process has entered its final stage ahead of contract signing. - FY2025MitigatedAnnual report
「Gross profit on completed construction contracts was ¥42,319 million, compared with a gross loss of ¥157 million in the previous consolidated fiscal year, owing to agreement with GPX, the customer, on an amendment to the contract for Train 1 of the GPX project, recognition of additional revenue from completed overseas projects and steady progress on projects under way in Japan and overseas.」
Agreement on the amendment to the GPX Train 1 contract and additional revenue improved results from a gross loss on completed construction contracts in the previous period to gross profit of ¥42,319 million. Contract amendments for Trains 2 and 3 remain under discussion. - FY2024MaterialisedAnnual report
「Gross profit or loss on completed construction was a gross loss of ¥157 million, compared with gross profit of ¥32,709 million in the previous fiscal year, because the Company recognized sufficient costs expected to be required to complete the GPX project, despite progress on certain projects being steady.」
For the Golden Pass LNG project in the United States, the estimate of completion costs, prepared in light of the possibility of a partner's withdrawal, was reflected in actual results as a gross loss on completed construction contracts and an operating loss of ¥15,006 million. - FY2020-Q1MitigatedAnnual report
「The main factors were an improvement in profitability at the Cameron LNG project being executed in the United States, following agreement with the customer on new contractual terms and the achievement of incentive bonuses under the contract, as well as steady execution of other projects in hand, which improved operating profit, while sharp fluctuations in exchange rates resulted in foreign exchange losses.」
Profitability at the Cameron LNG project improved following agreement with the customer on new contractual terms and the achievement of incentive bonuses, partially mitigating the deterioration in results caused by the previous risk of cost increases. - FY2019WorsenedAnnual report
「At the Cameron LNG project being executed in the United States, numerous rework and finishing activities arose during the final stages of construction of Train 1, resulting in unexpected cost increases. In addition, productivity has not improved because the turnover rate among U.S. field workers has remained higher than anticipated.」
At the Cameron LNG project, rework and finishing activities, high worker turnover and lower productivity led to unexpected cost increases and were identified as the main issues for the full fiscal year. - FY2019-Q3WorsenedAnnual report
「During the 3rd quarter of the current fiscal year, the substantial increase in construction costs for the Cameron LNG project in Louisiana, United States, led to the recognition of a significant operating loss, ordinary loss and quarterly net loss attributable to owners of the parent.」
The increase in construction costs for the Cameron LNG project became further evident in the form of a significant operating loss, ordinary loss and quarterly net loss attributable to owners of the parent. - FY2019-Q2WorsenedAnnual report
「In the course of this process, it became clear that the shortage of field workers, particularly skilled workers, since early 2018 was expected to continue, owing to the resumption of shale gas development in the United States following the rise in crude oil prices and the recovery projects from Hurricane Harvey, which struck the Gulf Coast in summer 2017, entering full swing this year. Labor costs had also risen substantially. At the same time, worker retention was extremely low because of circumstances specific to the project, including the considerable inconvenience of the construction site being located far from urban areas, and the productivity of field construction work, which had temporarily improved through around April 2018, began to decline again from May. As a result, construction costs, including field labor costs, increased substantially, leading to the recognition of a quarterly net loss attributable to owners of the parent.」
At the Cameron LNG project, construction costs increased substantially because of shortages of skilled workers, higher labor costs and lower productivity, becoming the main cause of the quarterly net loss. - FY2019-Q1WorsenedAnnual report
「The main factors were a decline in consolidated net sales from completed construction contracts and additional construction costs incurred on the LNG project being executed in the United States.」
Additional construction costs were incurred on the U.S. LNG project, becoming a major factor behind the operating loss and ordinary loss alongside the decline in net sales from completed construction contracts. - FY2018WorsenedAnnual report
「Gross profit on completed construction contracts fell 77.5% year on year to ¥8,618 million, as we re-examined construction costs for the LNG project being executed in the United States and anticipated a substantial cost increase. The gross profit margin on completed construction contracts also fell 4.6 percentage points from 6.3% in the previous consolidated fiscal year to 1.7%.」
The anticipated increase in construction costs for the U.S. LNG project was reflected in the deterioration of full-year results, with gross profit on completed construction contracts down 77.5% and the margin at 1.7%. - FY2018-Q3RestatedAnnual report
「This resulted from a detailed re-examination of construction costs for the LNG project being executed in the United States, which led us to anticipate a substantial cost increase and recognize an operating loss and an ordinary loss, while we also recognized the reversal of a provision for losses on businesses of affiliated companies as extraordinary income and recorded an expected federal corporate tax refund at our U.S. subsidiary arising from the carryback of tax losses, among other factors.」
We have reconfirmed that the anticipated increase in construction costs for the U.S. LNG project was a factor behind the operating loss and ordinary loss. - FY2018-Q2MaterialisedAnnual report
「This resulted from a detailed re-examination of construction costs for the LNG project being executed in the United States, which led us to anticipate a substantial cost increase and recognize an operating loss and an ordinary loss, while we also recognized the reversal of a provision for losses on businesses of affiliated companies as extraordinary income and recorded an expected federal corporate tax refund at our U.S. subsidiary arising from the carryback of tax losses, among other factors.」
A detailed review of construction costs for the LNG project being executed in the United States led us to anticipate a substantial cost increase, resulting in the recognition of an operating loss and an ordinary loss.