Decline in Machinery and Plant Projects Due to Weak Crude Oil and LNG Prices
First written in FY2016. 11 of 18 entries say "Worsened", first in FY2017-Q3. Latest entry: FY2023.
Toyo Kanetsu K.K. moved to the "Worse" side of this theme in 2016, 8 years before the typical company in this theme (2024).
The whole theme swung hardest in 2020: 3 of 6 companies on the "Worse" side.
1 other company's latest entry also says "Worsened".
- FY2023WorsenedAnnual report
「As the energy shift accelerates amid growing global environmental awareness and the transition to a low-carbon and decarbonized society, a decline in demand for tanks for LNG, crude oil and other products is unavoidable and could adversely affect the company's business environment.」
The wording has strengthened from the possibility of declining demand to a statement that a decline in demand for tanks for LNG, crude oil and other products is unavoidable. - FY2022-Q3RestatedAnnual report
「For the third quarter cumulative consolidated period (1 April 2021 to 31 December 2021), consolidated results reflected the continued challenging business environment in the Machinery and Plant Business, although the Logistics Solutions Business performed steadily,」
The company states that the Machinery and Plant Business continues to face a challenging business environment. However, revenue was generated mainly from maintenance projects for domestic refineries, improving operating income. - FY2022-Q2RestatedAnnual report
「Revenue was generated mainly from maintenance projects for domestic refineries, resulting in revenue of ¥9,894 million, up 105.0% year on year. In the current fiscal year, ¥4,959 million of revenue and the same amount of cost of sales were added due to a change in accounting standards. On the previous accounting basis, excluding this impact, revenue was ¥4,935 million, up 2.2%. Operating income was an operating loss of ¥29 million, compared with an operating loss of ¥233 million in the same quarter of the previous year.」
The Machinery and Plant Business recorded higher revenue, mainly from maintenance projects for domestic refineries, and narrowed its operating loss from ¥233 million in the same quarter of the previous year to ¥29 million. However, challenging business conditions, including for new-build projects, continued. - FY2021ReframedAnnual report
「As the energy shift accelerates amid growing global environmental awareness and the transition to a low-carbon and decarbonized society, declining demand for tanks for LNG, crude oil and other products could adversely affect the company's business environment.」
The traditional risk of fewer projects, centered on weak crude oil prices and easing LNG supply and demand, is being reframed as the risk of a structural decline in demand for LNG and crude oil tanks due to decarbonization and the energy shift. - FY2021-Q3WorsenedAnnual report
「Although the order environment for new-build projects remained weak, partly due to the impact of COVID-19, revenue was generated mainly from domestic maintenance projects. Revenue was ¥6,430 million, down 6.9% year on year. Operating income was affected by the low profitability of some projects and the reversal of gains recognized in the previous fiscal year from provisions for construction projects recorded in prior years. As a result, the operating loss was ¥418 million, compared with an operating loss of ¥93 million in the same quarter of the previous year.」
With the order environment for new-build projects remaining weak, revenue fell 6.9% and the operating loss widened from ¥93 million in the same period of the previous year to ¥418 million. The order and earnings environment for the Machinery and Plant Business is deteriorating. - FY2021-Q2WorsenedAnnual report
「Although orders for new-build projects remained weak, partly due to the impact of COVID-19, robust domestic maintenance projects brought revenue to ¥4,827 million, up 29.5% year on year. However, operating income was affected by the low profitability of some projects and the reversal of gains recognized in the previous fiscal year from provisions for construction projects recorded in prior years. As a result, the operating loss was ¥233 million, compared with an operating loss of ¥9 million in the same quarter of the previous year.」
The downturn in new-build projects, including the impact of COVID-19, continued. Despite higher revenue from domestic maintenance projects, the operating loss widened from ¥9 million in the same period of the previous year to ¥233 million due to low-profitability projects and other factors. - FY2020-Q3RestatedAnnual report
「With no improvement in the weak order environment for new-build projects, revenue was generated mainly from maintenance projects, resulting in revenue of ¥6,908 million, up 39.9% year on year. In operating income, the operating loss narrowed to ¥93 million, compared with an operating loss of ¥925 million in the same quarter of the previous year, mainly due to gains from the reversal of provisions for construction projects recorded in prior years.」
The company states that the weak order environment for new-build projects in the Machinery and Plant Business remains unchanged. Revenue increased, mainly from maintenance projects, and the operating loss narrowed from the same period of the previous year, although the results included the impact of the reversal of provisions. - FY2020-Q2RestatedAnnual report
「There was no major change in the weak order environment, and revenue from this business was ¥3,727 million, up 10.0% year on year. In operating income, the business posted an operating loss of ¥9 million, compared with an operating loss of ¥563 million in the same quarter of the previous year, mainly due to gains from the reversal of provisions for construction projects recorded in prior years.」
The company states that there was no major change in the weak order environment facing the Machinery and Plant Business. Revenue rose 10.0% and the operating loss narrowed, but the results included the impact of the reversal of provisions, while challenging order conditions continued. - FY2020-Q1RestatedAnnual report
「Although the weak order environment continued, a gain was recognized from the reversal of provisions for construction projects recorded in prior years. This was a one-off item, and overall business conditions remained challenging. Revenue from this business was ¥1,226 million, down 29.8% year on year, while operating profit was ¥29 million, compared with an operating loss of ¥449 million in the same quarter of the previous year.」
The company states that the Machinery and Plant Business continues to face a weak order environment and challenging business conditions. Revenue fell 29.8%, but operating profit turned positive due to the one-off reversal of provisions for construction projects from prior years. - FY2019-Q3WorsenedAnnual report
「Although the company won some small- and medium-sized overseas projects amid the continuing weak order environment, overall business conditions remained challenging. Revenue from this business was ¥4,936 million, down 31.3% year on year, and it posted an operating loss of ¥925 million, compared with operating profit of ¥211 million in the same quarter of the previous year.」
Although the company won some small- and medium-sized overseas projects, the weak order environment and challenging business conditions continued. Revenue from the Machinery and Plant Business fell 31.3%, resulting in an operating loss of ¥925 million. - FY2019-Q2WorsenedAnnual report
「Although the company won small- and medium-sized overseas projects amid the continuing weak order environment, overall business conditions remained challenging. Revenue from this business was ¥3,389 million, down 39.1% year on year, and it posted an operating loss of ¥563 million, compared with operating profit of ¥291 million in the same quarter of the previous year.」
Although the Machinery and Plant Business won small- and medium-sized overseas projects, the weak order environment and challenging business conditions continued, with revenue down 39.1% and an operating loss of ¥563 million. - FY2019-Q1WorsenedAnnual report
「Although the company won some small- and medium-sized overseas projects amid the continuing weak order environment, overall business conditions remained challenging. Revenue from this business was ¥1,746 million, down 44.0% year on year, and it posted an operating loss of ¥449 million, compared with operating profit of ¥427 million in the same quarter of the previous year.」
The Machinery and Plant Business continued to face a weak order environment and challenging business conditions, with revenue falling 44.0% and the business moving into an operating loss. - FY2018WorsenedAnnual report
「Against this backdrop, although there are some signs that development of large plants is resuming, driven by factors including rising crude oil prices and increased energy demand accompanying the economic recovery, the order environment remains challenging for the Machinery and Plant Business.」
Although crude oil prices are rising and there are signs that development of large plants is resuming, the order environment remains challenging. Revenue from the Machinery and Plant Business fell 27.6%, resulting in a segment loss of ¥178 million. - FY2018-Q3WorsenedAnnual report
「Due in part to a decline in large new-build projects in Japan and overseas, revenue from this business was ¥7,181 million, down 22.7% year on year. Operating profit was ¥211 million, down 67.4%, mainly due to a decline in overseas projects.」
Revenue from the Machinery and Plant Business fell 22.7% and operating profit fell 67.4% due to a decline in large new-build projects in Japan and overseas and a downturn in overseas projects, with the impact of weak energy-related projects increasing. - FY2018-Q2WorsenedAnnual report
「Net sales in this business were ¥5,564 million, down 22.1% year on year, due in part to a decline in large new construction projects in Japan and overseas. Operating profit was ¥291 million, down 72.0% year on year, due in part to a downturn in overseas projects.」
A decline in large new construction projects and a downturn in overseas projects resulted in declines of 22.1% in net sales and 72.0% in operating profit in the Machinery and Plant business. - FY2017WorsenedAnnual report
「Amid limited opportunities for new construction and expansion of tanks as capital investment plans were delayed due to an uncertain market environment, the company pursued an aggressive sales strategy that broadened its order-taking areas. However, it failed to win large projects, while competition in the maintenance field also intensified, resulting in a challenging business environment. As a result, net sales in this business were ¥13,852 million, down 39.2% from the previous consolidated fiscal year, operating profit was ¥633 million, down 67.0%, and orders received were ¥8,182 million, down 34.0%.」
The limited availability of large tank projects continued, and declines in net sales, operating profit and orders received in the Machinery and Plant business widened in the full-year results. The impact of the risks has also become clear in quantitative terms. - FY2017-Q3WorsenedAnnual report
「Capital investment demand failed to grow because of weak crude oil prices and a prolonged easing of the LNG supply-demand balance, while orders for large new construction projects remained sluggish. As a result, net sales in this business were ¥9,284 million, down 47.2% year on year, and operating profit was ¥648 million, down 65.6%, due to a decline in high-margin projects.」
Continued weak crude oil prices and a prolonged easing of the LNG supply-demand balance resulted in declines of 47.2% in net sales and 65.6% in operating profit in the Machinery and Plant business. - FY2016MaterialisedAnnual report
「Over the long term, the Machinery and Plant business expects growth in emerging economies, particularly in Southeast Asia, and expanding energy demand driven by population growth. In the short term, however, opportunities for new construction and expansion of large tanks have declined as low crude oil prices and a looser LNG supply-demand balance have led to delays in capital investment plans for oil- and gas-related facilities. As a result, net sales in this business were ¥22,788 million, down 22.6% from the previous consolidated fiscal year, operating profit was ¥1,921 million, down 31.1%, and orders received were ¥12,387 million, down 6.6%.」
The company described weak energy markets and project delays, which materialized as declines in net sales, operating profit and orders received in the Machinery and Plant business for the period.