- Yokohama tilted building subcontractor cuts forecast 14%
- Impact of probe on earnings too hard to determine yet
Asahi Kasei Corp., the Japanese subcontractor at the center of a probe that began with a tilted building in Yokohama, lowered its annual forecast by 14 percent.
The fallout from falsified data at some projects it worked on was not included in the revision because it is difficult to estimate at this point, the company said.
Asahi Kasei lowered its net income forecast to 91 billion yen ($745 million) from an original forecast of 106 billion yen for the year ending March 31 after booking a charge for its electronics business, the company said in a statement Friday. The housing business accounted for 40 percent of Asahi Kasei’s operating profit last year.
The scandal has sent the Topix construction and real estate indexes lower, making them the worst performing groups on the Topix index since Oct. 13, when news of the flawed building first emerged. Asahi Kasei’s shares have declined 21 percent and shares of Sumitomo Mitsui Construction Co., the contractor, have plunged 28 percent in the period.
Asahi Kasei’s stock rose 0.3 percent to 734.4 yen at the close of trading in Tokyo.
Mitsui Fudosan Co., the seller of the Yokohama apartments, kept its full-year earnings unchanged at 107 billion yen in a separate filing on Friday after the market closed. Its shares gained 1.1 percent in Tokyo.
No decision has been made about executives giving back their compensation, Hideki Kobori, Asahi Kasei’s chief financial officer, said at a press conference in Tokyo, responding to an earlier Nikkei report that the company is considering such a move.
Discussions about executive compensation may start after the company investigates the condition of more than 3,000 buildings it worked on in the past 10 years, Kobori said.
Asahi Kasei said on Nov. 2 it found falsified data on 19 of 41 projects that were overseen by the supervisor of the lopsided Yokohama building that triggered the investigation. A number of other employees doctored data on separate projects, according to a statement by the company on the same day.