Declining profitability of large-scale construction projects
First written in FY2019. 6 of 13 entries say "Mitigated", first in FY2020. Latest entry: FY2026.
1 other company's latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「Gross profit in the civil engineering segment improved from a margin of 11.9% in the previous fiscal year to 13.0% in the current fiscal year, up 1.1 percentage points year on year. Gross profit in the architectural segment improved from a margin of 8.3% in the previous fiscal year to 9.8% in the current fiscal year, up 1.5 percentage points year on year.」
Profit margins improved in both the civil engineering and architectural segments, easing the deterioration in profitability of large-scale and loss-making projects that had emerged in the previous fiscal year. - 2026-05-11MitigatedResults
「営業利益は、大型工事における採算改善、物価上昇分の価格転嫁交渉の進展等により、売上総利益率が改善したことから、前期に比べ8億1千万円増加し17億7千2百万円(前期比84.4％増)となりました。」
大型工事の採算改善と価格転嫁交渉の進展により、前期に顕在化していた工事採算性の悪化がさらに緩和している。 - FY2025MitigatedAnnual report
「Gross profit in the civil engineering segment improved from a margin of 10.7% in the previous fiscal year to 11.9% in the current fiscal year, up 1.2 percentage points year on year. Gross profit in the architectural segment improved from a margin of 4.8% in the previous fiscal year to 8.3% in the current fiscal year, up 3.5 percentage points year on year.」
Profit margins improved in both the civil engineering and architectural segments, easing the deterioration in profitability that had emerged in the previous fiscal year. In the architectural segment, the factors cited were negotiations to pass through higher prices and reductions in construction costs. - FY2024WorsenedAnnual report
「(Civil engineering segment) Gross profit deteriorated from a margin of 20.9% in the previous fiscal year to 10.7% in the current fiscal year, down 10.2 percentage points year on year. … (Architectural segment) Gross profit deteriorated from a margin of 5.5% in the previous fiscal year to 4.8% in the current fiscal year, down 0.7 percentage points year on year. The main factors behind the decline in profit were higher construction costs resulting from soaring labor and raw material costs and other factors.」
The civil engineering segment's profit margin declined following the completion of large-scale construction projects, while the architectural segment's margin declined due to soaring labor and raw material costs, with the deterioration in profitability quantified in the annual results. - FY2024-Q3WorsenedAnnual report
「Operating profit decreased by ¥1,245 million from the same quarter of the previous year to ¥117 million, representing a 91.4% decrease from the same quarter of the previous year, due to lower sales, substantial increases in labor and raw material costs, and the impact of provisions for construction loss reserves for unprofitable construction projects received in prior years, among other factors.」
Loss-making projects won in prior fiscal years and provisions for construction losses were reflected in the results as factors weighing on operating profit, alongside a sharp rise in labor and raw material prices. - FY2024-Q2WorsenedAnnual report
「Operating profit decreased by ¥469 million from the same quarter of the previous year, resulting in an operating loss of ¥110 million, compared with operating profit of ¥359 million in the same quarter of the previous year, due to lower sales, higher labor and raw material costs, and the impact of unprofitable construction projects received in prior years, among other factors.」
In addition to rising labor and raw material prices, the impact of loss-making projects won in prior fiscal years was explicitly identified as a factor behind the operating loss, with profitability risks related to large-scale and loss-making projects reflected in the results. - FY2023Improved civil engineering profitability and deteriorated architectural profitabilityAnnual report
「(Civil engineering segment) Gross profit improved from a margin of 8.8% in the previous fiscal year to 20.9% in the current fiscal year, up 12.1 percentage points year on year. The main factors behind the increase in profit were improved profitability on large-scale construction projects and other factors. … (Architectural segment) Gross profit deteriorated from a margin of 7.9% in the previous fiscal year to 5.5% in the current fiscal year due to soaring raw material prices and other factors.」
The civil engineering segment's profit margin improved significantly due to improved profitability on large-scale construction projects, while the architectural segment's margin deteriorated due to soaring raw material prices, with the risks manifesting differently across the segments. - FY2023-Q3MitigatedAnnual report
「Despite lower project profitability resulting from higher raw material and other costs, operating profit increased by ¥1,184 million from the same quarter of the previous year to ¥1,362 million, due to improved profitability on large-scale construction projects, representing a 663.6% increase from the same quarter of the previous year.」
While the deterioration in profitability caused by soaring raw material costs and other factors persisted, operating profit increased 663.6% year on year due to improved profitability on large-scale construction projects, recovering from the deterioration caused by low-margin projects reported in the previous quarter. - FY2023-Q1WorsenedAnnual report
「Although revenue increased, operating profit declined by ¥126 million from the same quarter of the previous year, resulting in an operating loss of ¥38 million, compared with operating profit of ¥87 million in the same quarter of the previous year. This was due in part to low-margin projects won amid intense competition on contract prices, which weighed on gross profit.」
The company states that winning low-margin projects weighed on gross profit, causing operating profit to turn from a profit in the same period of the previous year to a loss of ¥38 million. - FY2022MitigatedAnnual report
「(Architectural segment) Gross profit improved from a margin of 6.3% in the previous fiscal year to 7.9% in the current fiscal year, up 1.6 percentage points year on year, due in part to improved construction profitability.」
The architectural segment's profit margin improved from 6.3% to 7.9% in response to the decline in profitability that emerged in the previous fiscal year. - FY2021WorsenedAnnual report
「Gross profit deteriorated from a margin of 9.9% in the previous fiscal year to 8.8% in the current fiscal year, down 1.1 percentage points year on year, due in part to declining construction profitability.」
The civil engineering segment's profit margin declined from 9.9% to 8.8% after improving in the previous fiscal year. The architectural segment's margin also declined from 7.1% to 6.3%, and the completion of loss-making projects and other factors were cited as reasons for the decline in company-wide operating profit. - FY2020MitigatedAnnual report
「Gross profit improved from a margin of 6.3% in the previous fiscal year to 9.9% in the current fiscal year, up 3.6 percentage points year on year, due in part to improved profitability on large-scale construction projects.」
The civil engineering segment's profit margin improved from 6.3% to 9.9% in response to the decline in profitability on large-scale construction projects that emerged in the previous fiscal year. - FY2019First statedAnnual report
「Gross profit declined from a margin of 8.5% in the previous fiscal year to 6.3% in the current fiscal year, down 2.2 percentage points year on year, due in part to declining profitability on large-scale construction projects.」
The company describes, for the first time as a separate factor and together with figures, how declining profitability on large-scale construction projects actually led to a deterioration in the civil engineering segment's profit margin.