Deteriorating Profitability in Contract Development
First written in FY2018. 3 of 8 entries say "Mitigated", first in FY2020. Latest entry: FY2026.
The whole theme swung hardest in 2017: 9 of 31 companies on the "Worse" side.
21 other companies' latest entry also says "Restated".
- FY2026RestatedAnnual report
「However, if profitability deteriorates due to defects arising after delivery, changes in specifications or additional requests for development projects from customers, additional work hours, or unforeseen events during development, this may affect our performance.」
The company continues to disclose the risk of deteriorating project profitability due to defects, specification changes and additional work hours in commissioned development projects. - 2026-08-12MitigatedEarnings
「Higher gross margins on development projects resulted in gross profit of ¥166,235 thousand, up 105.0% from the previous fiscal year.」
Against the deterioration in profitability of commissioned development recorded in the previous fiscal year, the company reported higher gross profit from development and implementation services and an improved gross margin. - FY2025MaterialisedAnnual report
「Because the company received orders for large-scale projects and follow-on projects from existing customers, revenue for the fiscal year was ¥365.479 million, up 15.2% year on year. However, gross profit was ¥81.095 million, down 21.4% year on year, due to an increase in work hours resulting from the complexity of development projects.」
Although revenue increased in the development and implementation services business, gross profit fell 21.4% because development projects became more complex and required more work hours, reflecting deteriorating profitability in contracted development. - FY2024RestatedAnnual report
「At the end of the fiscal year, the company recorded the estimated amount of losses on contracts for which losses are expected, to provide for future losses. However, if defects or delays in system development work cause costs to substantially exceed the original estimate, a loss on contracts or an additional provision may be required.」
The company continues to record a provision for losses on contracts and identifies the risk that defects or delays may cause costs to exceed the original estimate and require an additional provision. - FY2022MitigatedAnnual report
「Amount of provision for losses on contracts corresponding to inventories presented on a net basis Previous consolidated fiscal year (30 June 2021) Work in progress ¥4.229 million Current consolidated fiscal year (30 June 2022) Work in progress ¥4.178 million」
The company continues to record a provision for losses on contracts, but the amount decreased from ¥4.229 million in the previous consolidated fiscal year to ¥4.178 million. - FY2020MitigatedAnnual report
「Amount of provision for losses on contracts corresponding to inventories presented on a net basis: current consolidated fiscal year, ¥2.325 million.」
The company continues to record a provision for losses on contracts, but the amount decreased from ¥3.416 million in the previous consolidated fiscal year to ¥2.325 million. - FY2019MaterialisedAnnual report
「At the end of the consolidated fiscal year, the company recorded the estimated amount of losses on contracts for which losses are expected, to provide for future losses. Amount of provision for losses on contracts corresponding to inventories presented on a net basis: current consolidated fiscal year, ¥3.416 million.」
The company recorded a ¥3.416 million provision for losses on contracts for contracts expected to generate losses, indicating that the risk of deteriorating profitability in contracted development has been recognised in the accounts. - FY2018First statedAnnual report
「If profitability deteriorates because of additional work hours resulting from defects arising after delivery, customer requests to change the development method, additional specifications or other factors, or because of unforeseen accidents during development, this may affect the Group's performance.」
The company identifies deteriorating profitability caused by specification changes, defects, additional work hours and other factors as risks, while referring to project management from the order stage.