Risk of Unprofitable Projects
First written in FY2016. 6 of 17 entries say "Materialised", first in FY2017-Q1. Latest entry: FY2022-Q2.
Intelligent Wave moved to the "Worse" side of this theme in 2016, 5 years before the typical company in this theme (2021).
The whole theme swung hardest in 2025: 5 of 16 companies on the "Worse" side.
6 other companies' latest entry also says "Restated".
- FY2022-Q2RestatedAnnual report
「System development operations are profitable and progressing smoothly, and we expect the business in the second half of the fiscal year to proceed steadily.」
No loss-making projects arose in the second quarter either, and the company has reconfirmed that the related risk has not materialized. - FY2021RestatedAnnual report
「When accepting orders for systems development, particularly for long-term projects, the company works to eliminate loss-making projects by dividing the work into multiple periods and entering into contracts in stages, while strengthening its project management framework through more accurate estimates, thorough risk management and management of development methodologies.」
The company continues to use staged contracts, improve estimate accuracy, manage risk and manage development methodologies to prevent loss-making projects from arising. - FY2020MitigatedAnnual report
「Software development operations proceeded smoothly, with no loss-making projects arising, and profit and loss improved from the previous fiscal year.」
For development projects that had become loss-making through the previous fiscal year, no loss-making projects arose in the current fiscal year, and profit and loss in the Financial Systems Solutions business improved. - FY2020-Q2RestatedAnnual report
「Software development operations progressed smoothly, and there were no unprofitable projects.」
The company has reconfirmed that no loss-making projects have arisen. No new projects becoming loss-making or losses being recognized have been reported. - FY2020-Q1RestatedAnnual report
「Software development operations progressed smoothly, and there were no unprofitable projects.」
The company has reconfirmed that no loss-making projects, which had occurred through the previous fiscal year, arose during the cumulative first quarter. - FY2019MitigatedAnnual report
「There were no unprofitable development projects in the current period. Meanwhile, FEP systems development projects progressed steadily and sales of the Company's proprietary packaged software NET+1 (Net Plus One) increased, resulting in operating profit of ¥921 million, above the initial plan of ¥880 million.」
In addition to the absence of unprofitable projects, progress in FEP development projects and NET+1 sales resulted in operating profit exceeding plan. - FY2019MitigatedAnnual report
「There were no unprofitable development projects in the current period,」
The Company explained that, although unprofitable projects, including large-scale projects, had occurred through the previous period, there were no unprofitable development projects in the current period. - FY2019-Q3MitigatedAnnual report
「There were no unprofitable development projects.」
The Company explained that, although unprofitable projects, including large-scale projects, had occurred through the previous period, there were no unprofitable development projects during the cumulative third-quarter period. - FY2018MaterialisedAnnual report
「However, because the large-scale development project for which revenue was recorded in the third quarter became unprofitable, the Company was unable to generate the profit initially expected. Operating profit fell below the previous period's result, to ¥547 million from ¥702 million.」
The large-scale development project became unprofitable over the full fiscal year, reducing operating profit from ¥702 million in the previous period to ¥547 million. - FY2018-Q3MaterialisedAnnual report
「At the second-quarter results, because a large-scale development project scheduled to generate revenue in the third quarter was expected to become unprofitable, the Company recorded a ¥143 million provision for loss on orders in cost of sales. At the end of the current period, revenue from the project was recorded and a ¥48 million provision for product warranties was recorded.」
Regarding the expected loss-making status of the large-scale project identified in the second quarter, the Company recorded a ¥143 million provision for loss on orders and, when revenue was recorded, a ¥48 million provision for product warranties. - FY2018-Q2MaterialisedAnnual report
「Because a large-scale development project scheduled to generate revenue in the third quarter was expected to become unprofitable, the Company recorded a provision for loss on orders of ¥143 million in cost of sales.」
The expected loss-making status of the large-scale development project scheduled to generate revenue in the third quarter became concrete, and a ¥143 million provision for loss on orders was recorded. - FY2018-Q1MitigatedAnnual report
「In the previous period, certain systems development projects became unprofitable, leaving operating profit at ¥37 million, but there were no such unprofitable projects in the current period.」
The Company cited the unprofitable projects that occurred in the previous period as a comparison and explained that there were no similar unprofitable projects in the first quarter of the current period. - FY2017MaterialisedAnnual report
「Because specific development projects became unprofitable in the first and third quarters, losses of ¥38 million and ¥12 million, respectively, were recorded, and the Company was unable to secure the profit forecast at the beginning of the period.」
In addition to the existing ¥38 million loss, a ¥12 million loss was recorded on another project in the third quarter, resulting in multiple unprofitable projects during the fiscal year. - FY2017-Q3MaterialisedAnnual report
「Because the delivery date for a specific systems development project scheduled to generate revenue in March 2017 was postponed to May of the same year, expenses exceeding the original plan were incurred and the project was expected to become unprofitable. Accordingly, the Company recorded an estimated loss of approximately ¥12 million as a provision.」
Following the recording of the ¥38 million loss in the first quarter, another project was expected to become unprofitable because of the delayed delivery date and additional expenses, and an estimated loss of approximately ¥12 million was recorded as a provision. - FY2017-Q2RestatedAnnual report
「Operating profit for the cumulative second-quarter period was ¥216 million, but because a loss of ¥38 million related to an unprofitable systems development project was recorded in the first quarter, the result was below the initial forecast of ¥250 million.」
The Company again cited the ¥38 million loss from an unprofitable project in the first quarter as a factor behind first-half results falling below the initial forecast. This indicates the continuing impact of an event that had already occurred, not a new loss. - FY2017-Q1MaterialisedAnnual report
「Among the systems development projects received in the previous period, profitability deteriorated and the projects became unprofitable in application development projects outside the network connectivity field. As a result, the Company recorded a loss of approximately ¥38 million, leaving operating profit in the Financial Systems Solutions business at ¥52 million.」
The risk associated with an unprofitable project materialized and was recorded as a loss of approximately ¥38 million. The Company stated that the project was a specific, small-scale engagement and indicated that it would strengthen management controls to prevent similar events in larger development projects in the future. - FY2016First statedAnnual report
「Even when a project is expected to be profitable at the time the order is received, it may become unprofitable because of changes in requirements, work hours exceeding the initial estimate or delays in delivery, potentially affecting the company’s results.」
The company also refers to phased contracting for long-term projects, improving estimate accuracy, strengthening risk management and managing development methods to prevent such projects from arising.