Lower Profitability Due to Reduced Profitability of Large Projects
First written in FY2020. 6 of 9 entries say "Restated". Latest entry: FY2026.
Itfor moved to the "Worse" side of this theme in 2025, 5 years after the typical company in this theme (2020).
The whole theme swung hardest in 2025: 5 of 16 companies on the "Worse" side.
3 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Project estimate accuracy was 60.9%, down 1.6 percentage points from the previous year. This was thought to reflect a temporary decline in accuracy mainly due to external factors, including a timing mismatch between cost estimates and revenue estimates for projects. Going forward, to improve estimate accuracy, we will thoroughly analyze the causes of estimation errors identified in reviews of past projects, implement countermeasures and pursue improvements.」
Project estimate accuracy declined from 62.5% in the previous fiscal year to 60.9%, widening the gap from the 85.0% target. The company indicated that it plans to proceed with cause analysis and countermeasures. - FY2025MaterialisedAnnual report
「In the results for fiscal 2024, project estimate accuracy was 62.5%, down 25.8 percentage points from the previous year's 88.3%, which exceeded the target by 3.3 percentage points, due partly to the large number of projects that exceeded cost estimates as a result of prioritizing quality and delivery schedules.」
The company disclosed that prioritizing quality and delivery schedules resulted in many projects exceeding cost estimates, causing estimate accuracy to decline from 88.3% in the previous year to 62.5%. The profitability risk associated with lower margins on large projects has materialized as a specific KPI result. - FY2024-Q2RestatedAnnual report
「During the first six months of the fiscal year, there were no significant changes in the occurrence of the major risks that management recognizes as potentially having a material impact on the financial position, operating results and cash flows of the consolidated companies, among the matters concerning the business and accounting conditions described in the quarterly report, or in the "Business and Other Risks" described in the annual securities report for the previous fiscal year.」
The company states that there have been no material changes regarding the decline in profitability due to lower margins on large projects. - FY2023-Q3RestatedAnnual report
「During the cumulative third-quarter period, there were no occurrences of major risks that management recognizes could materially affect the financial condition, operating results or cash flow of the consolidated companies among the matters concerning the business and financial conditions described in the quarterly report, nor were there any material changes to the "Business and Other Risks" described in the securities report for the previous fiscal year.」
The company states that there have been no material changes regarding the decline in profitability due to lower margins on large projects. - FY2023-Q1RestatedAnnual report
「During the cumulative first-quarter period, there were no occurrences of major risks that management recognizes could materially affect the financial condition, operating results or cash flow of the consolidated companies among the matters concerning the business and financial conditions described in the quarterly report, nor were there any material changes to the "Business and Other Risks" described in the securities report for the previous fiscal year.」
The company states that there have been no material changes regarding the decline in profitability due to lower margins on large projects. - FY2022-Q2RestatedAnnual report
「During the cumulative second-quarter period, there were no occurrences of major risks that management recognizes could materially affect the financial condition, operating results or cash flow of the consolidated companies among the matters concerning the business and financial conditions described in the quarterly report, nor were there any material changes to the "Business and Other Risks" described in the securities report for the previous fiscal year.」
The company states that there have been no material changes regarding the decline in profitability due to lower margins on large projects. - FY2021-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
The company states that there have been no material changes regarding the decline in profitability due to lower margins on large projects. - FY2021-Q1RestatedAnnual report
「During the cumulative first-quarter period, there were no occurrences of major risks that management recognizes could materially affect the financial condition, operating results or cash flow of the consolidated companies among the matters concerning the business and financial conditions described in the quarterly report, nor were there any material changes to the "Business and Other Risks" described in the securities report for the previous fiscal year.」
The company states that there have been no material changes regarding the decline in profitability due to lower margins on large projects. - FY2020MaterialisedAnnual report
「Meanwhile, some large projects, including projects for the retail industry, became less profitable, causing segment profit to decline year on year. As a result, order intake was ¥8,333 million, or 85.6% of the same period of the previous fiscal year, revenue was ¥8,988 million, or 118.8%, and segment profit was ¥1,797 million, or 91.4%.」
The company states that some large projects actually became less profitable and that segment profit in system solutions declined to 91.4% of the same period of the previous fiscal year.