IHI Corp., Japan's third-biggest maker of heavy equipment, said Friday its first-half losses increased threefold after underestimating engineering and project costs.
The net loss expanded to ¥37.3 billion in the six months to Sept. 30, from a restated ¥10.1 billion loss a year earlier, the Tokyo-based company said Friday. Sales rose 5.6 percent to ¥546.4 billion.
IHI is being investigated by the Tokyo Stock Exchange and faces delisting after the company failed to control project costs at its biggest unit, which builds boilers, plants and liquefied natural gas terminals. Chief Executive Officer Kazuaki Kama called the situation "an unprecedented crisis" for the company, which started as a shipyard in 1853.
"The company needs to change its management system to avoid a recurrence and send a message to the market that the company will change for the better," said Yoku Ihara, head of equity research at Retela Crea Securities Co. in Tokyo. He made the comments before the earnings announcement.
IHI reported that its first-half operating loss, or sales minus the cost of goods sold and administrative expenses, widened more than fivefold to ¥54.4 billion from a year earlier. The company forecast net income of ¥26 billion for the year.