Nagaoka International Posts Impairment Charge Due to Project Uncertainty

TOKYO, Aug 07 (Pulse News Wire) – Nagaoka International Corporation (6239.T) reported an impairment charge of ¥196 million related to a project delay involving SONATRACH, an Algerian state-owned oil and gas company. The charge was recorded in the sales and general administrative expenses for the fiscal year ending June 2026 due to uncertainties surrounding the resumption of manufacturing activities under a contract with Petrofac HQC IJV LLC, a joint venture between British engineering firm Petrofac and Chinese state-owned company HQC.

In May 2026, Nagaoka had secured a contract for the STEP project, which involves engineering, procurement, and construction services. However, financial issues at Petrofac led to a halt in production progress. Despite ongoing negotiations with SONATRACH and the joint venture, there remains uncertainty regarding the restart of manufacturing and recovery of receivables.

The impairment charge reflects the company's inability to determine the exact timing and conditions for resuming operations and recovering payments. As such, the recognition of previously accrued contract assets totaling ¥393 million is now subject to significant risk. Nagaoka stated that it will continue to monitor developments closely and take necessary actions based on evolving circumstances.

Any further material changes will be disclosed promptly.