Q&A From The Conference Call[PDF:160.5 KB].pdf

JGC Holdings Corporation reported its third-quarter financial results for FY2019, with a gross profit ratio of 9.6%, slightly higher than the full-year forecast. The improvement was due to the drawdown of overseas project contingency reserves and receipt of change orders. The company expects to achieve its full-year net sales forecast, driven by revenue from the LNG Canada project.

The company reported a gain on sales of investment securities of around 2 billion yen and a loss of around 3 billion yen, primarily due to the sale of former consolidated subsidiary JGC Mirai Solar Co., Ltd. and equity-method affiliate Rabigh Arabian Water and Electricity Company.

The client's final investment decision (FID) for the Mozambique Rovuma LNG project is expected within the fiscal year. The company also expects the client to make an FID for the Iraq refinery upgrade project within the fiscal year, despite temporary tensions in the Middle East.

For FY2020, the company refrained from commenting on net sales, citing dependence on project awards and order scales. The market environment for overseas oil and gas, infrastructure, and domestic operations is viewed as stable.

The company provided updates on unprofitable projects, including the gas booster construction project in Algeria, which is progressing smoothly, and the oil refinery project in Kuwait, which is nearing handoff.

Finally, the company is considering share buybacks as part of its shareholder return policies, driven by improved net operating cash flow and significant recovery of liquidity.