Risk of low-profitability projects arising

「Implementing PRM (Project Risk Management) activities contributed to reducing loss-making and low-profitability projects.」

「The profit margin improved as the company shifted toward high-profitability projects and thoroughly managed project risks through PRM (Project Risk Management) activities.」

「In addition to improved gross profit margins resulting from project selection and thorough project risk management through PRM (Project Risk Management) activities, profit increased because selling, general and administrative expenses were restrained by factors including unspent advertising and promotional expenses relative to plan.」

「The company positions “PRiMER” (Note), which strengthens its PRM (project risk management) activities aimed at enhancing quality control, as a key pillar. The system development and corporate planning divisions work closely together to systematically promote improvement activities to secure profit and avoid risks from the time orders are received.」

「The company positions “PRiMER,” which strengthens its PRM (project risk management) activities aimed at enhancing quality control, as a key pillar. The system development and corporate planning divisions work closely together to systematically promote improvement activities to secure profit and avoid risks from the time orders are received.」

「In terms of profit, customer companies' IT investment has remained strong, and the engineer utilization rate has also remained high. In addition, winning high-profitability projects and efforts through PRM (Project Risk Management) activities to prevent unprofitable projects from arising contributed to securing profit.」

「In terms of profit, the ability to win high-profitability projects and PRM (Project Risk Management) activities contributed to profit improvement.」

「Provision for contract losses － ¥2,192 thousand」

「Operating the PRM enhancement measure “PRiMER” led to a reduction in loss-making and low-margin projects.」

「The reduction in unprofitable projects resulting from PRM (Project Risk Management) activities contributed to profit improvement.」

「PRM (project risk management) activities reduced unprofitable projects and restrained overtime pay, among other factors, contributing to profit improvement.」

「There was no balance of provisions at the end of the current consolidated fiscal year.」

「Provision for contract losses － ¥2,378 thousand」

「The company has positioned PRiMER, a new framework that strengthens PRM (Project Risk Management) activities aimed at reinforcing quality management, as a key pillar. The system development and corporate planning divisions are working closely together to systematically promote improvement activities to secure profitability at the time of order intake and avoid risks.」

「Provision for contract losses 3,104 16,683」

「Provision for contract losses 3,104 15,029」

「As a result, the company developed and began operating new PRM enhancement measures, PRiMER. Going forward, it will operate PRiMER, repeatedly improve it to make it more robust, and work to prevent recurrence through its operation.」

「Meanwhile, on the profit front, customers’ IT investment has remained firm, and the utilization rate of systems engineers has remained high as order volume increased. In addition to continuing cost-cutting measures, efforts including thorough implementation of PRM (project risk management) activities also contributed to profit improvement.」

「The company worked to reduce loss-making and low-profitability projects in the current consolidated fiscal year, continuing efforts from the previous consolidated fiscal year. However, low-profitability projects arose in the first half, restraining the improvement in profit margins.」

「In terms of profit, the company has maintained a high SE utilization rate, as customer IT investment has remained strong. It also pursued expense reduction and PRM (Project Risk Management) activities, but some projects became low-profitability projects during the first half, weighing on profit.」

「In addition, although the company pursued expense reduction and PRM (Project Risk Management) activities, some projects became low-profitability projects, weighing on profit.」

「Some low-profitability projects arose, putting downward pressure on the gross profit margin.」

「Provision for contract losses ― ¥26,155 thousand」

「Provision for contract losses － ¥973 thousand」

「However, if low-profitability projects arise among the contracted projects because of unexpected costs, such as the difficulty of development or bugs (errors or defects in computer programs), the company’s results may be affected.」