Risk of Insufficient Utilization after Capital Investment
First written in FY2017. 4 of 6 entries say "Materialised", first in FY2022. Latest entry: FY2026.
Hokuetsu moved to the "Worse" side of this theme in 2024, 3 years after the typical company in this theme (2021).
The whole theme swung hardest in 2024: 10 of 25 companies on the "Worse" side.
5 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「In the containerboard production facilities of the Pulp and Paper business, where the recoverable amount fell below the carrying amount due to deterioration in the business environment, the carrying amount was reduced to the recoverable amount, and the reduction was recognized as an impairment loss in extraordinary losses.」
For the containerboard production facilities, an impairment loss of ¥202 million was recorded due to the deterioration in the business environment, up from ¥170 million in the previous fiscal year. - FY2025MaterialisedAnnual report
「In the containerboard production facilities of the Pulp and Paper business, where the recoverable amount fell below the carrying amount due to deterioration in the business environment, the carrying amount was reduced to the recoverable amount, and the reduction was recognized as an impairment loss in extraordinary losses.」
An impairment loss of ¥170 million was recognized on containerboard production facilities due to deterioration in the business environment. This followed the ¥403 million impairment loss recognized in the previous fiscal year. - FY2024MaterialisedAnnual report
「In the containerboard production facilities of the Pulp and Paper business, where the recoverable amount fell below the carrying amount due to deterioration in the business environment, the carrying amount was reduced to the recoverable amount, and the reduction was recognized as an impairment loss in extraordinary losses.」
An impairment loss of ¥403 million, including ¥372 million for the principal facilities, was recognized on containerboard production facilities due to deterioration in the business environment. - FY2023MitigatedAnnual report
「At Jiangmen Xinghui Paper Co., Ltd., prolonged weakness in demand for packaging materials, including the company's products, due to an economic slowdown caused by the Chinese government's zero-COVID policy resulted in indications of impairment. However, because the net selling price exceeded the carrying amount, no impairment loss was recognized.」
Although indications of impairment were identified due to weak demand, the net selling price exceeded the carrying amount, and no impairment loss was recognized for the fiscal year under review. - FY2022MaterialisedAnnual report
「In the containerboard production facilities of the Pulp and Paper business, where the recoverable amount fell below the carrying amount due to deterioration in the business environment, the carrying amount was reduced to the recoverable amount, and the reduction was recognized as an impairment loss in extraordinary losses.」
The risk relating to utilization rates and the market environment after capital investment materialized as an impairment loss of ¥3,587 million on containerboard production facilities. - FY2017First statedAnnual report
「Depending on market conditions, new facilities may not achieve the expected utilization rates. This could affect the Group’s operating results and financial position.」
The company explicitly identifies insufficient utilization of new facilities due to market conditions as a capital investment risk.