Ailing contractor Hazama Corp. said Friday its group net loss swelled to 122.6 billion yen in fiscal 2002, due to valuation losses on its asset holdings, including stocks. The firm posted a group net loss of 1.66 billion yen in fiscal 2001.

The appraisal loss was booked to allow the firm to proceed with a three-year turnaround plan. The massive net loss gave the construction company a negative net worth of 111.170 billion yen, on total assets of 374.669 billion yen.

Operating profit fell 73.7 percent to 4.03 billion yen, on sales of 362.16 billion yen, down 13.1 percent.

These figures were attributed to dwindling public works spending and sluggish investment in the private sector.

Hazama President Fumiya Yamato told reporters that he would step down to take management responsibility for the results. Approval for this move is expected to be given at a shareholders' meeting scheduled for June 27.

Yamato will be replaced by Hazama Vice President Junichi Shinmyo.

Under the three-year plan, which took effect last month, Hazama on Oct. 1 will split into a construction company and a real estate company.

The firm will transfer its nonperforming assets and a major part of its interest-bearing debts to the latter.

Hazama also said it has entered into a capital tieup with Ando Corp., in which the midsize constructor will inject Hazama with 1 billion yen through the purchase of preferred shares.

For fiscal 2003, Hazama expects group sales to fall to 301 billion yen and net losses to 13.2 billion yen as a result of squeezing asset holdings.