Tokyo Sangyo has booked a ¥3.123bn provision against receivables and contract assets on a renewable power plant it contracted to build in 2020, and two further charges on other projects. The company disclosed all three in an extraordinary report filed on 13 November 2026.
The unpaid receivable. On the 2020 project, where Tokyo Sangyo is the engineering, procurement and construction (EPC) contractor, a court ruling has raised doubts over the project's permits, creating what the company calls serious uncertainty in the business plan. The owner, a special-purpose company set up for the project, had not paid after a September 2026 due date. Tokyo Sangyo says payment is owed; the owner is withholding it.
The company set aside a provision for doubtful accounts equal to the full ¥3.123bn it expects to be uncollectable, booked as an extraordinary loss in the interim results for the fiscal year ending March 2027. It adds that the provision is an accounting judgment on recoverability and does not accept the owner's withholding. The owner is not named, and the report says no legal restructuring has occurred. Tokyo Sangyo also booked a ¥1.313bn construction-loss provision on this project, in cost of sales, for unavoidable costs it expects.
A second project. On a project contracted in 2022, a subcontractor's finances have deteriorated sharply. Tokyo Sangyo judges it likely it will have to cover costs the subcontractor cannot bear, and likely that it could not recover them. It booked a ¥960mn construction-loss provision in cost of sales.
A guarantee call. On a plant delivered under a 2020 contract, Tokyo Sangyo had issued an on-demand bank guarantee tied to performance. The plant missed the guaranteed level, which the company attributes to an event it believes is the owner's responsibility. It paid ¥719mn in October 2026 after a call on the guarantee, and booked it as an extraordinary loss because its view and the owner's differ widely. Under the contract the funds are held by the owner, and their final ownership depends on further talks.
For the interim period, the company reports construction-loss provisions of ¥2.273bn in cost of sales and the ¥719mn guarantee loss.