Deterioration in the profitability of some construction projects undertaken to expand the business scope
First written in FY2018-Q3. 12 of 24 entries say "Worsened", first in FY2018. Latest entry: FY2026.
Tokyo Energy & Systems moved to the "Worse" side of this theme in 2018, 5 years before the typical company in this theme (2023).
The whole theme swung hardest in 2018: 3 of 13 companies on the "Worse" side.
2 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「The plant and equipment construction business recorded orders of ¥101,114 million, up 18.3% from the previous fiscal year, revenue of ¥77,297 million, up 25.3%, and segment profit of ¥10,688 million, up 155.7%.」
Orders and revenue increased in the plant and equipment construction business, while segment profit also rose 155.7% from the previous fiscal year, representing a significant improvement from the previous deterioration in profitability. - 2026-04-23MitigatedRevision of earnings forecasts
「Profit margins have improved as order-taking activities focused on profitability, which we have pursued since the previous fiscal year, have steadily taken hold, together with initiatives to improve productivity.」
States that profitability has continued to improve as profitability-focused order-taking activities have taken hold and productivity has improved. - FY2026-H1MitigatedAnnual report
「As a result of continued order-taking activities focused on profitability since the previous fiscal year and improved margins from a decrease in non-conforming and unprofitable projects, operating profit was ¥1,180 million, compared with an operating loss of ¥249 million in the same period of the previous year」
Order-taking activities focused on profitability and a decrease in non-conforming and unprofitable projects eased the burden of the previously reported deterioration in profitability during the current interim period. - FY2025WorsenedAnnual report
「The plant and equipment construction business recorded orders of ¥85,464 million, up 46.0% from the previous fiscal year, revenue of ¥61,672 million, down 25.7%, and segment profit of ¥4,180 million, down 58.2%.」
Although orders increased in the plant and equipment construction business, revenue fell 25.7% and segment profit fell 58.2%, with pressure on profitability increasing again. - FY2024MitigatedAnnual report
「The plant and equipment construction business recorded orders of ¥58,545 million, down 16.6% from the previous fiscal year, revenue of ¥83,049 million, up 8.2%, and segment profit of ¥9,999 million, up 7.4%.」
Despite the previously reported deterioration in profitability associated with the expansion of business areas and other factors, segment profit in the plant and equipment construction business increased 7.4% from the previous fiscal year. - FY2024-Q3MitigatedAnnual report
「On the profit front, operating profit came to ¥2,912 million, up 82.4% year on year, as the cost ratio improved due to increased revenue and the shift to the percentage-of-completion method following the finalization of contract amounts for projects previously accounted for under the cost recovery method.」
Operating profit increased 82.4% year on year due to an improvement in the cost ratio, easing the previously reported deterioration in profitability and burden from projects with high cost ratios during the cumulative third quarter period. - FY2024-Q2Rework costs and other expenses for Kashiwazaki-Kariwa Unit 6 put pressure on profitAnnual report
「On the profit front, although revenue increased, operating profit came to ¥1,002 million, down 28.9% year on year, due to provisions for contract losses, including rework costs arising from welding defects in the welded joints of the fixed fire-extinguishing system piping at Unit 6 of the Kashiwazaki-Kariwa Nuclear Power Station, and the higher cost ratio resulting from the progress of projects accounted for under the cost recovery method.」
A provision for loss on construction contracts related to rework costs and other expenses for Kashiwazaki-Kariwa Unit 6 was recognised and became a factor reducing operating profit, together with the higher cost ratio. - FY2024-Q1WorsenedAnnual report
「In terms of profit, operating profit fell 30.9% year on year to ¥376 million because the cost ratio increased due to the progress of projects applying the cost recovery method.」
The increase in the cost ratio associated with construction progress emerged as a 30.9% year-on-year decline in operating profit, and profitability remained under pressure in the current quarter. - FY2023WorsenedAnnual report
「In terms of profit, the Company recognised rework costs associated with welding defects in the fixed fire-extinguishing equipment piping at Units 6 and 7 of the Kashiwazaki-Kariwa Nuclear Power Station, while procurement prices for biomass fuel rose due to higher resource prices and exchange-rate fluctuations」
In addition to rework costs, higher biomass fuel prices emerged as a burden on profit, and profitability risks in construction and new businesses continued. - FY2023-Q3WorsenedAnnual report
「Regarding the rework costs for Unit 6 of the Kashiwazaki-Kariwa Nuclear Power Station, the Company recognised ¥685 million in cost of sales as a provision for loss on construction contracts and ¥1,015 million in extraordinary losses as a provision for compensation losses, according to the underlying causes.」
The Company determined that rework was necessary due to welding defects at Kashiwazaki-Kariwa Unit 6 and recognised a ¥685 million provision for loss on construction contracts and a ¥1,015 million provision for compensation losses. - FY2023-Q2MitigatedAnnual report
「Segment profit was ¥3,860 million, up 122.8% year on year.」
Although the previously reported deterioration in profitability associated with the expansion of business areas and the burden of upfront investments remained, segment profit in the plant and equipment construction business increased 122.8% year on year. - FY2022WorsenedAnnual report
「In terms of profit, although revenue increased, operating profit declined to ¥3,158 million from ¥4,104 million in the previous fiscal year, due to the higher proportion of projects with high cost ratios compared with the previous fiscal year, amortization of customer-related assets and other assets associated with the business transfer, and the recording of rework costs related to welding defects at Units 6 and 7 of the Kashiwazaki-Kariwa Nuclear Power Station as provisions for loss on damage compensation and provisions for loss on construction contracts.」
In addition to costs associated with the expansion of business areas and the business succession, provisions were recognised for rework costs arising from welding defects, and the pressure on profitability emerged as an actual decline in profit. - FY2022-Q3WorsenedAnnual report
「In terms of profit, although revenue increased, the Company undertook many projects with high cost ratios. In addition, upfront investments for future growth, including amortisation of customer-related assets and other items associated with the business succession, costs to enter the biomass power generation business, and the development costs of the Thailand plant, the overseas production base, as well as higher expenses resulting from the aggressive promotion of sales and other activities, resulted in operating profit of ¥1,266 million, compared with ¥2,162 million in the same period of the previous year, and ordinary profit of ¥1,320 million, compared with ¥2,214 million in the same period of the previous year,」
The impact of upfront investments associated with the expansion of business areas and projects with high cost ratios emerged as an actual decline in profit, and profitability remained under pressure. - FY2022-Q2WorsenedAnnual report
「In terms of profit, although revenue increased, the recognition of revenue from projects with high cost ratios was front-loaded. In addition, upfront investments for future growth, including costs to enter the renewable energy sector and the recognition of amortisation of goodwill associated with the business succession and depreciation of the Thailand plant, the overseas production base,」
The front-loaded recognition of revenue from projects with high cost ratios, along with costs to enter the renewable energy sector and amortisation associated with the business succession and the Thailand plant, emerged as factors reducing profit. - FY2021MitigatedAnnual report
「The plant and equipment construction business recorded orders of ¥79,331 million, down 25.9% from the previous fiscal year, revenue of ¥58,683 million, down 10.4%, and segment profit of ¥6,961 million, up 1.9%.」
Although the deterioration in profitability associated with the expansion of business areas was previously reported, segment profit in the plant and equipment construction business increased 1.9% from the previous fiscal year. - FY2021-Q3MitigatedAnnual report
「Segment profit was ¥4,402 million, up 18.5% year on year.」
Despite the previously reported deterioration in profitability associated with the expansion of business areas and other factors, segment profit in the plant and equipment construction business has continued to increase. - FY2020MitigatedAnnual report
「The facilities construction business recorded orders of ¥62,999 million, down 13.3% year on year, net sales of ¥65,508 million, down 3.1%, and segment profit of ¥6,828 million, up 32.1%.」
Although deterioration in profitability associated with expansion of the business scope had been reported previously, full-year segment profit for the facilities construction business rose 32.1% year on year. - FY2020-Q3MitigatedAnnual report
「Segment profit was ¥3,716 million, up 238.0% year on year.」
Facilities construction segment profit rose 238.0% year on year, indicating further progress in the recovery from the deterioration in profitability associated with the previously reported expansion of the business scope and other initiatives. - FY2020-Q2MitigatedAnnual report
「Segment profit was ¥2,220 million, compared with a segment loss of ¥466 million in the same period of the previous year.」
Against the previously reported deterioration in profitability while expanding the business scope, the facilities construction segment turned from a loss in the same period of the previous year to a profit in the cumulative second quarter under review. - FY2019WorsenedAnnual report
「Segment profit was ¥5,168 million, down 43.1% year on year.」
Full-year segment profit for the facilities construction business was ¥5,168 million, down 43.1% year on year. - FY2019-Q3WorsenedAnnual report
「In terms of profit, operating profit was ¥1,179 million, down 48.6% year on year, ordinary profit was ¥1,362 million, down 44.0%, and net income attributable to owners of the parent was ¥992 million, down 37.9%, due to the decline in net sales and the impact of a deterioration in the cost ratio while pursuing expansion of the business scope and other initiatives amid a challenging competitive environment.」
The cost ratio deteriorated while the Company pursued expansion of the business scope and other initiatives, and the decline in operating profit and other measures has continued. - FY2019-Q2WorsenedAnnual report
「Segment loss was ¥466 million, compared with segment profit of ¥3,380 million in the same period of the previous year.」
The facilities construction segment went from profit of ¥3,380 million in the same period of the previous year to a loss of ¥466 million, as the deterioration in profitability, including on projects undertaken to expand the business scope, continued. - FY2018WorsenedAnnual report
「In terms of profit, although we worked to achieve thorough cost reductions and other measures, operating profit was ¥4,205 million, down 27.9% year on year, ordinary profit was ¥4,356 million, down 26.8%, and net income attributable to owners of the parent was ¥2,904 million, down 28.4%, due to lower net sales and additional costs incurred on some large-scale construction projects.」
Additional costs on some large-scale construction projects remained a factor reducing profit for the full fiscal year, resulting in year-on-year declines in operating profit, ordinary profit and net income. - FY2018-Q3MaterialisedAnnual report
「Some construction projects undertaken to expand the business scope going forward experienced deterioration in profitability.」
Profitability deteriorated on some construction projects undertaken to expand the business scope, and this was cited as a factor contributing to the decline in operating profit and other figures.