Unprofitable Projects and Quality Issues
First written in FY2016. 15 of 33 entries say "Worsened", first in FY2019-Q1. Latest entry: FY2026.
Digital Information Technologies moved to the "Worse" side of this theme in 2017.
0 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「As for the other activities, of the 2 projects requiring additional work in SI development related to electronic contract services, work on 1 has effectively been brought to a close, although discussions with the customer remain, while work on the other will continue after agreeing on a rescheduled timetable with the customer.」
The 2 projects requiring additional work in SI development related to electronic contract services became apparent. Work on 1 was brought to a close and the other was rescheduled, causing the provision for loss on orders received to increase from ¥72 thousand to ¥9.987 million. - FY2026-H1WorsenedAnnual report
「Provision for loss on orders received 72 1,021」
The provision for loss on orders received increased from ¥72 thousand at the end of the previous consolidated fiscal year to ¥1.021 million at the end of the current interim consolidated reporting period, indicating that the risk of unprofitable projects has become apparent in the accounts. No provision for loss on orders received had been recognized at the end of the previous interim consolidated reporting period. - FY2024MitigatedAnnual report
「The Business Solutions segment, comprising business systems development and operations support, significantly outperformed the previous year in both revenue and profit, reflecting the reversal of losses recognized on unprofitable projects in the previous fiscal year.」
After losses on unprofitable projects arising in the previous fiscal year were recognized, segment profit recovered as the closing work was completed. The provision for loss on orders received also declined from ¥14.792 million at the end of the previous fiscal year to ¥84 thousand. - FY2024-Q3MitigatedAnnual report
「Profit in particular declined year on year in the first quarter, when we carried out the handover work required to bring the unprofitable projects that arose in the previous fiscal year to a close. From the second quarter, when the work to close those projects was completed, earnings returned to a growth trend, and cumulative profit for the third quarter reached a record high.」
It explains that earnings returned to a growth trend after the work to close the unprofitable projects arising in the previous fiscal year was completed, resulting in record-high cumulative profit for the third quarter. - FY2024-Q2MitigatedAnnual report
「The work to close out the loss-making project of concern was completed as scheduled in the first quarter.」
The work to close out the loss-making project was completed as scheduled in the first quarter. The provision for loss on contracts also decreased from ¥14,792 thousand at the end of the previous fiscal year to ¥2,682 thousand at the end of the second quarter of the current fiscal year. - FY2024-Q1MitigatedAnnual report
「As the handover work for the loss-making project was completed as scheduled in the first quarter, no impact is expected from the second quarter onward.」
The handover work for the loss-making project was completed as scheduled in the first quarter, and no impact is expected from the second quarter onward. The provision for loss on contracts also decreased from ¥14,792 thousand at the end of the previous fiscal year to ¥6,979 thousand. - FY2023MitigatedAnnual report
「As a result of the contract change, we reduced net sales by ¥340 million and gross profit by ¥370 million in the third quarter. Although we carried out handover work to another company and other activities related to the contract change in the fourth quarter, we expect the impact on the following fiscal year to be limited because the project is expected to close early.」
The loss-making project arising from insufficient confirmation of requirements led to a contract change and handover, while the company explains that its early closure will have a limited impact on the following fiscal year. The provision for loss on contracts was ¥14,792 thousand. - FY2023-Q3WorsenedAnnual report
「This loss-making project was a project for which a contract was signed in the fourth quarter of the previous fiscal year. Because the requirements had not been sufficiently confirmed, a discrepancy arose between the company's understanding and the customer's, necessitating substantial additional rework. As it became difficult to secure the personnel required for this work, we determined that securing both personnel and profitability would be difficult. To minimise the loss, following discussions with the customer, we decided to terminate the contract for the stages from production onward. As a result of the contract change, we reduced net sales by ¥340 million and gross profit by ¥370 million in the third quarter. Although some impact is expected to remain in the fourth quarter due to handover work to another company and other activities arising from the contract change, we expect no impact from the following fiscal year onward.」
Insufficient confirmation of requirements, a discrepancy with the customer's understanding, substantial additional rework and difficulty securing personnel materialised in an actual loss-making project, resulting in termination of the contract from the production stage onward. In the third quarter, net sales were reduced by ¥340 million and gross profit by ¥370 million, while the provision for loss on contracts increased from ¥45 thousand to ¥26,620 thousand. - FY2023-Q2WorsenedAnnual report
「Provision for loss on contracts 45 951」
The provision for loss on contracts increased from ¥45 thousand at the end of the previous consolidated fiscal year to ¥951 thousand at the end of the second quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts and that the recognised amount has also increased. - FY2023-Q1WorsenedAnnual report
「Provision for loss on contracts 45 190」
The provision for loss on contracts increased from ¥45 thousand at the end of the previous consolidated fiscal year to ¥190 thousand at the end of the first quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts and that the recognised amount has also increased. - FY2022-Q3WorsenedAnnual report
「Provision for loss on contracts — 340」
A ¥340 thousand provision for loss on contracts was recognised at the end of the third quarter of the current fiscal year, up from zero at the end of the previous consolidated fiscal year, indicating that the risk associated with loss-making projects has once again materialised in the accounts and increased from ¥40 thousand at the end of the previous quarter. - FY2022-Q2MaterialisedAnnual report
「Provision for loss on contracts — 40」
A ¥40 thousand provision for loss on contracts was recognised at the end of the second quarter of the current fiscal year, up from zero at the end of the previous consolidated fiscal year, indicating that the risk associated with loss-making projects has once again materialised in the accounts. - FY2021-Q2MitigatedAnnual report
「Provision for loss on contracts 2,833 —」
The provision for loss on contracts decreased from ¥2,833 thousand at the end of the previous consolidated fiscal year to zero at the end of the second quarter of the current fiscal year, eliminating the provision recognised for loss-making projects. - FY2021-Q1MitigatedAnnual report
「Provision for loss on contracts 2,833 15」
The provision for loss on contracts decreased from ¥2,833 thousand at the end of the previous consolidated fiscal year to ¥15 thousand at the end of the first quarter of the current fiscal year. The risk remains reflected in the accounts, but the recognised amount decreased substantially. - FY2020WorsenedAnnual report
「Provision for loss on contracts 282 2,833」
The provision for loss on contracts increased from ¥282 thousand at the end of the previous consolidated fiscal year to ¥2,833 thousand, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2020-Q3WorsenedAnnual report
「Provision for loss on contracts 282 4,527」
The provision for loss on contracts increased from ¥282 thousand at the end of the previous consolidated fiscal year to ¥4,527 thousand at the end of the third quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2020-Q2WorsenedAnnual report
「Provision for loss on contracts 282 359」
The provision for loss on contracts increased from ¥282 thousand at the end of the previous consolidated fiscal year to ¥359 thousand at the end of the second quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2020-Q1WorsenedAnnual report
「Provision for loss on contracts 282 2,063」
The provision for loss on contracts increased from ¥282 thousand at the end of the previous consolidated fiscal year to ¥2,063 thousand at the end of the first quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2019WorsenedAnnual report
「Provision for loss on contracts 74 282」
The provision for loss on contracts increased from ¥74 thousand at the end of the previous consolidated fiscal year to ¥282 thousand at the end of the current consolidated fiscal year, indicating that the risk associated with loss-making projects has materialised in the accounts. - FY2019-Q3WorsenedAnnual report
「Provision for loss on contracts 74 7,444」
The provision for loss on contracts increased from ¥74 thousand at the end of the previous consolidated fiscal year to ¥7,444 thousand at the end of the third quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts and that the amount has increased substantially. - FY2019-Q2WorsenedAnnual report
「Provision for loss on contracts 74 2,622」
The provision for loss on contracts increased from ¥74 thousand at the end of the previous consolidated fiscal year to ¥2,622 thousand at the end of the second quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts and that the amount has also increased. - FY2019-Q1WorsenedAnnual report
「Provision for loss on contracts 74 210」
The provision for loss on contracts increased from ¥74 thousand at the end of the previous consolidated fiscal year to ¥210 thousand at the end of the first quarter of the current fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2018MaterialisedAnnual report
「Provision for loss on contracts — 74」
A ¥74 thousand provision for loss on contracts was recognised at the end of the current consolidated fiscal year, indicating that the risk associated with loss-making projects has materialised in the accounts. - FY2018-Q3MaterialisedAnnual report
「Provision for loss on contracts — 80」
A ¥80 thousand provision for loss on contracts was recognised at the end of the third quarter of the current consolidated fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2018-Q2MaterialisedAnnual report
「Provision for loss on contracts — 284」
A ¥284 thousand provision for loss on contracts was recognised at the end of the second quarter of the current consolidated fiscal year, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. The amount has been quantified. - FY2018-Q1MaterialisedAnnual report
「Provision for loss on contracts — 614」
A ¥614 thousand provision for loss on contracts was recognised at the end of the first quarter of the current consolidated fiscal year, indicating that the risk associated with loss-making projects has materialised in the accounts. - FY2017-Q3MaterialisedAnnual report
「Provision for loss on contracts — 525」
A ¥525 thousand provision for loss on contracts was recognised on the quarterly consolidated balance sheet, indicating that the risk associated with loss-making projects continues to be reflected in the accounts. - FY2017-Q2MaterialisedAnnual report
「Provision for loss on contracts — 571」
A ¥571 thousand provision for loss on contracts was recognised on the quarterly consolidated balance sheet, indicating that the risk associated with loss-making projects has materialised in the accounts. - FY2016First statedAnnual report
「In the Group's contract software development business, project profitability may deteriorate when it is difficult to accurately estimate the development scale and other factors at the time an order is received because of the nature of the work, or when various conditions change after an order is received. In addition, quality issues, such as bugs or service failures, in the software products and services provided by the Group could result in additional costs for rework and claims for damages.」
The company identifies difficulty in preparing estimates, changes in conditions, bugs and service failures as factors that can worsen project profitability.