[Company analysis] Chiyoda Corporation(千代田化工建設)

「Chiyoda Corporation(千代田化工建設)」 is a Japanese construction and engineering company. In the past, it has strong independence culture before the collapse of burble economy. But after that, they accepted finiancial support from「Mitsubishi Group(三菱グループ)」and「Kellogg Brown & Root」, so they become a member of the Mitsubishi Group. In the past, they were listed on the 1st section of the Tokyo Stock Exchange, but eventually they were fallen into 2nd section due to their excess debt. The number of consolidated employees is approximately 6,137

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Chiyoda Corp.
Company name (Japanese)	千代田化工建設
Date of establishment	Tuesday, January 20, 1948
Headquarters location	〒220-8765 神奈川県横浜市西区みなとみらい4-6-2
Capital	43,396
Consolidated sales	341,952
Consolidated operating profit	(199,795)
Consolidated total assets	352,341
Consolidated capital	(59,154)
Capital adequacy ratio	-16.8%
Consolidated number of employees	6,137

 

 

 

2. Summary and Features

 
This company was established in 1948 as a part of「Mitsubishi Oil Co., Ltd.,(三菱石油)」 and in 1957「Chiyoda Construction(千代田化工建設)」was separated and became independent. The first overseas expansion was the construction of an essential oil factory in Saudi Arabia in the latter half of the 1960s. Since then, it has expanded to over 40 countries around the world. 「Chiyoda Construction」is currently undertaking several large-scale construction projects in LNG plants in Qatar, Sakhalin in the eastern part of Russia, and others.

「Chiyoda Construction」was once called "the three largest companies in engineering" together with「JGC Corporation (日揮)」and「Toyo Engineering Corporation(東洋エンジニアリング)」. They carry out EPC (Engineering, Procurement, Construction) of the plant and have many achievements in Japan and overseas. Among them, the LNG plant has an overwhelming market share of 48%.

However, the recent situation of LNG plant construction market is not very good. LNG is over-supplied in the global market and this tendency is expected to continue until 2023. This is not good for「Chiyoda Construction」who has higher sales rate of LNG business than other competitors. Due to such adverse conditions, it was dropped to the 2nd section of the Tokyo Stock Exchange on August 1, 2019, and it was also excluded from Nikkei 225. 

However, the oversupply of LNG will someday become solved, so in the long run, they still have potential. In fact, the world LNG transaction volume for 2019 has expanded more than three times compared with 2000. Speaking of the LNG, it is a relatively clean energy source, so its demand is expected to be increase further in the future. That is why 「Mitsubishi Group」decided to invest a huge amount in「Chiyoda Corporation」

 

 

 

3. Major Business

 

■ Energy field

■ Petrochemical field

■ Pharmaceuticals and fine chemistry

■ Environmental conservation field

■ Industrial equipment field

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		603,745	510,873	341,952
Consolidated operating profit		15,680	-12,330	-199,795
Consolidated total assets		461,331	420,704	352,341
Consolidated net assets		157,125	159,418	-59,154
Breakdown of sales	Engineering business	600,244	507,573	338,592
	Others	3,501	3,300	3,360