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JGC vaults Africa siege to log profit

AFP-JIJI

Yokohama-based JGC Corp., which lost 10 employees during the Algerian hostage siege earlier this year, reported bumper profits Monday.

The 10 Japanese workers, hired directly or indirectly by JGC Corp., including former Vice President Tadanori Aratani, were killed by heavily armed militants who overran the Ain Amenas gas plant in January. Algerian troops ended the siege by force.

The bloody showdown with Algerian commandos left dozens of foreigners dead after the four-day crisis and sent a collective shudder through energy and infrastructure firms in resource-poor Japan.

The firm said Monday that net profit for the past fiscal year climbed nearly 20 percent to ¥46.18 billion on sales of ¥624.64 billion, up 12.1 percent.

But the suspension of JGC’s operations at Ain Amenas exacted a financial toll as well, the company said, with operating profit slipping by 4.4 percent to ¥64.12 billion.

“About 80 percent of sales of (the) JGC group come from overseas markets, and we are exposed to country risks . . . for example, unstable politics, wars, revolutions, internal unrest, terrorism,” among others, the plant builder said.

“Even though (the) JGC group is reviewing and strengthening our risk-control system . . . if unexpected changes in the business environment occur, that could affect our earnings through suspensions or delays of projects,” it said.

JGC strengthened its security in the aftermath of the Algerian crisis, it said, including in the areas of information-gathering and cooperation with governments.

But experts said Japan’s resource-hungry companies in Algeria and beyond do not plan to withdraw from Africa, despite the national trauma engendered by the Sahara hostage siege.

For the year to next March, JGC forecasts a net profit of ¥47 billion and operating profit of ¥69.5 billion on sales of ¥690 billion, as it expects strong demand for energy-related plants, it said.