Deterioration in profitability due to increased sales of low-margin equipment
First written in FY2018-Q2. 5 of 7 entries say "Mitigated", first in FY2018-Q3. Latest entry: FY2020.
The whole theme swung hardest in 2022: 2 of 6 companies on the "Worse" side.
1 other company's latest entry also says "Dropped".
- FY2020DroppedAnnual report
「In the systems sales business (sales of IT equipment and construction of information and communications infrastructure), lower revenue from university and public-sector projects resulted in net sales of ¥1,566 million (down 6.8%) and operating income of ¥94 million (down 32.3%).」
The direct reference previously made to an increase in sales of low-margin equipment was removed. - FY2019MitigatedAnnual report
「Although sales of equipment for universities declined, sales of highly profitable public-sector SI (systems integration) projects exceeded the previous year, resulting in sales of ¥1,681 million, down 7.4% year on year, and operating profit of ¥140 million, up 204.2%.」
There was no direct mention of low-margin equipment sales, while the systems sales business posted a substantial increase in profit on higher sales of public-sector SI projects. - FY2019-Q3MitigatedAnnual report
「Next, in the systems sales business, which covers the sale of IT equipment and the construction of information and communications infrastructure, higher revenue from university and public-sector projects resulted in revenue of ¥1,378 million (up 6.8% year on year) and operating profit of ¥133 million (compared with an operating loss of ¥15 million in the same period of the previous year).」
Although there was no direct mention of low-margin equipment sales, the systems sales business turned from an operating loss in the same period of the previous year to an operating profit, and the realised impact of deteriorating profitability continues to ease. - FY2019-Q2MitigatedAnnual report
「Next, in the systems sales business, which covers the sale of IT equipment and the construction of information and communications infrastructure, higher revenue from university and public-sector projects resulted in revenue of ¥1,180 million (up 48.3% year on year) and operating profit of ¥145 million (compared with an operating loss of ¥9 million in the same period of the previous year).」
Although there was no direct mention of low-margin equipment sales, the systems sales business turned from an operating loss in the same period of the previous year to an operating profit, mitigating the realised impact of deteriorating profitability. - FY2019-Q1MitigatedAnnual report
「Next, in the systems sales business, which covers the sale of IT equipment and the construction of information and communications infrastructure, higher revenue from university and public-sector projects resulted in revenue of ¥827 million (up 223.9% year on year) and operating profit of ¥103 million (compared with an operating loss of ¥7 million in the same period of the previous year).」
Although there was no direct mention of low-margin equipment sales, the systems sales business turned from an operating loss in the same period of the previous year to an operating profit, mitigating the realised impact of deteriorating profitability. - FY2018-Q3MitigatedAnnual report
「Next, in the systems sales business, which covers the sale of IT equipment and the construction of information and communications infrastructure, revenue increased across the service and distribution, university and public-sector project areas. Revenue was ¥1,291 million (up 96.9% year on year), and the operating loss was ¥15 million (compared with an operating loss of ¥25 million in the same period of the previous year).」
The increase in sales of low-margin equipment was no longer mentioned, and the operating loss narrowed from ¥25 million in the same period of the previous year to ¥15 million, mitigating the realised impact of deteriorating profitability. - FY2018-Q2First statedAnnual report
「Next, in the systems sales business, which covers the sale of IT equipment and the construction of information and communications infrastructure, revenue remained solid due to higher revenue from university and public-sector projects. However, as sales of less profitable equipment increased, revenue was ¥795 million (up 57.6% year on year) and the operating loss was ¥9 million (compared with an operating loss of ¥8 million in the same period of the previous year).」
The increase in sales of low-margin equipment was identified for the first time as a factor contributing to an actual operating loss, explicitly highlighting profitability risk in the systems sales business.