Risk of impairment losses due to failure to achieve the expected effects of capital investment and cost improvements
First written in FY2020. 1 of 2 entries say "Materialised", first in FY2023. Latest entry: FY2023.
Mitsubishi Steel Mfg. moved to the "Worse" side of this theme in 2023, 1 year after the typical company in this theme (2022).
The whole theme swung hardest in 2019: 10 of 28 companies on the "Worse" side.
27 other companies' latest entry also says "Materialised".
- FY2023MaterialisedAnnual report
「As stated in Part 5, Accounting Information, 1. Consolidated Financial Statements, (1) Consolidated Financial Statements, Notes to the Consolidated Financial Statements, Notes to the Consolidated Statements of Income, Note 8, Impairment Losses, the Group recognized an impairment loss of ¥551 million in the consolidated fiscal year.」
The impairment risk arising from shortfalls in the expected benefits of capital expenditures and cost improvements materialized as a ¥551 million impairment loss, primarily on spring-manufacturing equipment in the Philippines and Mexico. - FY2020First statedAnnual report
「During the period covered by the 2020 Medium-Term Management Plan, we plan to invest approximately ¥15 billion in capital expenditures to establish an optimal production structure. If, due to various external and internal factors, new facilities fail to start up as planned and do not deliver their full expected benefits, or if costs cannot be improved as planned, the Group's performance may be affected, including through the recognition of impairment losses on property, plant and equipment.」
The company explicitly identified the risk of impairment losses on approximately ¥15 billion of capital expenditures if the facilities fail to start up properly or planned cost improvements are not achieved. In the current fiscal year, it actually recognized an impairment loss on property, plant and equipment of ¥15.049 billion.