Chiyoda Corporation

Business Details

A build-to-order comprehensive engineering business that carries out consulting, planning, design, procurement, construction, commissioning, and maintenance for various plants and industrial facilities on an integrated basis. It operates under two main pillars—the Energy field (LNG, petroleum, petrochemicals) and the Global Environment field (pharmaceuticals, biochemistry, environment, new energy)—and conducts business in over 60 countries worldwide, including Qatar and the United States. Major customers are QatarEnergy (¥151,886 million in revenue for the current consolidated fiscal year) and Golden Pass LNG LLC (¥123,036 million). This is the Company Group's only reportable segment.

Recent Overview

Improved progress on both the GPX and NFE major LNG projects, along with a revision of GPX profitability, drove a 236% year-on-year increase in operating income

For the U.S. GPX Project, revised EPC contracts for Trains 1 through 3 were executed in November 2025, establishing an execution framework covering all trains, and in March 2026 construction and commissioning of Train 1 were completed with achievement of 1st LNG production. A revision of GPX profitability and steady progress on major domestic and overseas projects led to a significant improvement in the gross profit margin on completed construction (cost-to-revenue ratio for completed construction improved from 90.7% in FY2025 (ended March 2025) to 79.6% in FY2026 (ended March 2026)). New orders received increased 41.1% year on year to ¥298,024 million, driven by the expansion of Middle East oil and petrochemical EPC projects (up 304% year on year) and domestic decarbonization and life science projects. As a subsequent event, on June 30, 2026, the company plans to acquire and retire 110,400,000 shares of Class A preferred stock (63.1% of shares issued) from Mitsubishi Corporation for ¥55,112 million.

Key Products

Growth Drivers

• Steady continued execution of the revised EPC contract for the GPX Project (Trains 2 and 3) and progress toward completion
• Steady construction progress toward completion of the Qatar NFE Project (four trains, each with an annual capacity of 8 million tons), continuing into the following consolidated fiscal year
• Rapid expansion of EPC orders for oil and petrochemical-related facilities in the Middle East (new orders of ¥154,279 million in the current consolidated fiscal year, up 304.0% year on year)
• Robust domestic demand in the decarbonization and life science fields (all-solid-state batteries, SAF, CCS, pharmaceutical facilities, etc.)
• Expansion of orders in the environment, new energy, and infrastructure fields (new orders of ¥82,172 million in the current consolidated fiscal year, up 17.2% year on year)
• Improved financial soundness through the phased redemption of Class A preferred stock, with future transition to the Prime Market and resumption of dividends to common shareholders
• Revenue diversification through business co-creation, such as joint development of a large-scale water electrolysis system with Toyota Motor Corporation (hydrogen production scheduled to begin around May 2026)

Risks

• Risk of earnings volatility due to concentration in large-scale EPC projects (dependence on both the GPX and NFE projects, with LNG plant-related projects accounting for 51.8% of order backlog)
• Geopolitical risk (temporary suspension of construction on the NFE Project due to heightened tensions in the Middle East, including the armed conflict between the U.S., Israel, and Iran in February 2026)
• Foreign exchange risk (overseas revenue accounts for 71.1% of completed construction revenue, and foreign-currency-denominated contracts account for 67.5% of order backlog)
• JV partner risk (precedent of Zachry's withdrawal from the GPX Project; risk management under the new two-company JV structure with McDermott)
• Risk of rising equipment, materials, and labor costs (increased construction costs due to global inflation and supply chain disruptions)
• Continued non-payment of dividends to common shareholders due to the policy of allocating the entire distributable amount toward the redemption of Class A preferred stock (targeted for completion by the end of June 2028)
• Forecast for the next fiscal year (FY2027, ending March 2027) shows a significant decline in earnings, with revenue of ¥340,000 million (down 31.2% year on year) and operating income of ¥10,000 million (down 87.8% year on year)