Risk of Upfront Investment in New Businesses Falling Short of Plan
First written in FY2017. 12 of 21 entries say "Materialised", first in FY2018-Q1. Latest entry: FY2026.
Envipro Holdings moved to the "Worse" side of this theme in 2017, 7 years before the typical company in this theme (2024).
The whole theme swung hardest in 2026: 20 of 25 companies on the "Worse" side.
27 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「For the business assets described above, operating losses have continued and there has been a substantial divergence between the reasonable business plan and actual results. As the idle assets are not expected to be used in the future, their carrying amounts were reduced to recoverable amounts, and the reductions were recorded as impairment losses under extraordinary losses.」
The risk of failure to meet plans for business investment and new businesses materialized as impairment losses of ¥91.297 million on construction in progress for J-Cycle and ¥2.514 million on idle land held by Econecol. - FY2025-H1MaterialisedAnnual report
「Meanwhile, fixed costs increased with the start-up of the new plant, and profit declined.」
The increase in fixed costs associated with upfront investment in the new plant and the start of facility operations actually emerged as a decline in profit in the lithium-ion battery recycling business. - FY2023-Q2MitigatedAnnual report
「In addition, improved facility utilization increased productivity and handling volumes, resulting in higher revenue and profit. As a result, revenue from the lithium-ion battery recycling business was ¥775 million, up 106.1% year on year, and segment profit was ¥288 million, up 211.1% year on year.」
In the battery recycling business, facility utilization and productivity improved, and segment profit rose 211.1% year on year to ¥288 million. The impact on results of pressure on revenue from past upfront investment and failure to meet plans was further mitigated. - FY2023-Q1MitigatedAnnual report
「As a result, revenue from the lithium-ion battery recycling business was ¥326 million, up 122.3% year on year, and segment profit was ¥104 million, up 452.6% year on year.」
The battery recycling business posted a substantial year-on-year increase in revenue and segment profit of ¥104 million. The impact on results of the risk of pressure on revenue from upfront investment was further mitigated. - FY2022MitigatedAnnual report
「As a result, revenue from the lithium-ion battery recycling business was ¥1,347 million, up 277.8% from the previous fiscal year, and segment profit was ¥478 million, compared with a segment loss of ¥80 million in the previous fiscal year.」
The battery recycling business, which incurred an impairment loss and costs ahead of revenue in the previous fiscal year, turned from a segment loss into profit of ¥478 million in the current fiscal year, mitigating the impact on results of pressure on revenue from upfront investment. - FY2022-Q3MitigatedAnnual report
「As a result, revenue from the lithium-ion battery recycling business was ¥785 million, up 304.2% year on year, and segment profit was ¥249 million, compared with a segment loss of ¥104 million in the same period of the previous year.」
Revenue from the battery recycling business increased 304.2% year on year, and the business turned from a segment loss in the same period of the previous year to profit of ¥249 million. The impact on results of the risk of pressure on revenue from upfront investment was further mitigated. - FY2022-Q2MitigatedAnnual report
「As a result, revenue from the lithium-ion battery recycling business was ¥376 million, up 199.9% year on year, and segment profit was ¥92 million, compared with a segment loss of ¥80 million in the same period of the previous year.」
The battery recycling business turned from a segment loss in the same period of the previous year to profit of ¥92 million, mitigating the impact on results of the risk of pressure on revenue from upfront investment and failure to meet plans. - FY2021MaterialisedAnnual report
「The lithium-ion battery recycling business reviewed its earnings plan and recorded an impairment loss.」
An impairment loss of ¥437 million was actually recorded in connection with the review of the battery recycling business's earnings plan. - FY2021-Q3MaterialisedAnnual report
「The lithium-ion secondary battery and other recycling business is positioned as an important medium- to long-term growth driver for the Group. To accelerate future growth, the company did not defer potential risks, instead revisited its earnings plan to ensure appropriate profitability, and, following careful discussion by the Board of Directors, recorded an impairment loss of ¥437 million.」
Following a review of the earnings plan for the battery recycling business, the company recorded an impairment loss of ¥437 million on equipment and other assets, and the risk associated with upfront investment and failure to meet plans materialized as an actual loss. - FY2021-Q2Progress in procurement contracts and processing contracts while costs are incurred ahead of revenueAnnual report
「Although costs were incurred ahead of revenue in the new lithium-ion secondary battery and other recycling business, progress was made in signing procurement contracts with major battery manufacturers and accepting contracts to process waste batteries by utilizing the waste disposal business permit.」
In battery recycling, costs continued to be incurred ahead of revenue, while progress was made in procurement contracts with major battery manufacturers and contracts to process waste batteries utilizing the waste disposal business permit. - FY2021-Q1Securing processing contracts while costs are incurred ahead of revenueAnnual report
「Meanwhile, although costs were incurred ahead of revenue in the new lithium-ion secondary battery and other recycling business, progress was made by securing procurement from major EV battery manufacturers and processing volumes under contract by utilizing the waste disposal business permit obtained in July.」
In battery recycling, costs continued to be incurred ahead of revenue, while progress was made in securing procurement from major EV battery manufacturers and processing volumes under contract by utilizing the waste disposal business permit. - FY2020-Q3MaterialisedAnnual report
「Meanwhile, higher personnel costs due to increased staffing for the future and higher bonuses, a decline in equity in earnings of affiliates affected by falling market prices, and higher fixed costs related to recycling lithium-ion secondary batteries and other products in the new business put pressure on earnings.」
Fixed costs increased in the new lithium-ion secondary battery and other recycling business, and pressure on revenue associated with upfront investment and failure to meet plans continued to actually occur. - FY2020-Q2WorsenedAnnual report
「In the new business of recycling lithium-ion secondary batteries and other materials, processing facilities did not begin operating until the third quarter or later, so costs were incurred ahead of revenue and pressured profitability.」
The battery recycling facilities did not begin operating until the third quarter or later, so costs continued to be incurred before operations began. This was a further delay from the operating schedule of the second quarter or later indicated in the previous quarter. - FY2020-Q1MaterialisedAnnual report
「In the new business of recycling lithium-ion secondary batteries and other materials, the processing facilities did not begin operating until the second quarter or later, so costs were incurred ahead of revenue.」
In the battery recycling business, costs were incurred before the facilities began operating, and the risk of pressure on revenue from upfront investment has actually materialized. Upfront investment, including personnel costs for new facilities, was also reported in the disability welfare services business. - FY2019-Q3MaterialisedAnnual report
「In new businesses, fixed costs for the lithium-ion secondary battery and other recycling business were incurred ahead of schedule as the company aimed to complete the pilot plant by the end of the fiscal year. The disability welfare services business, although progressing toward profitability, remained sluggish because the number of users at facilities in the Kanto region was slow to grow.」
The upfront burden of fixed costs incurred in preparation for completing the pilot plant in the new business was reported, while the disability welfare services business also remained sluggish due to slow growth in the number of users. - FY2019-Q1MaterialisedAnnual report
「In new businesses, upfront costs for launching 株式会社プラ２プラ, which produces and sells recycled plastic, and 株式会社ＶＯＬＴＡ, which recycles lithium-ion secondary batteries and other materials, occurred first and pressured revenue.」
Upfront costs associated with launching new businesses actually occurred and were reported as an event that pressured revenue. - FY2018MaterialisedAnnual report
「In new businesses, fixed costs increased and pressured revenue in connection with the wood-based biomass fuel business, the opening of new facilities providing employment transition support for people with disabilities, and investment in the digital signage business. In addition, the company made active investments and proceeded with preparations to establish new sources of revenue, including the establishment of 株式会社プラ２プラ, a joint venture engaged in the production and sale of recycled plastic, and 株式会社ＶＯＬＴＡ, engaged in recycling lithium-ion secondary batteries and other materials.」
The increase in fixed costs and pressure on revenue associated with upfront investment in new businesses actually occurred throughout the fiscal year, while investment in and preparations for establishing プラ2プラ and VOLTA also progressed. - FY2018-Q3MaterialisedAnnual report
「On the other hand, fixed costs increased in new businesses, including the woody biomass fuel business, the opening of new employment transition support facilities for people with disabilities and investment in the digital signage business, weighing on earnings.」
The increase in fixed costs associated with opening facilities and making other investments in new businesses actually occurred as an event that continued to pressure revenue. - FY2018-Q2MaterialisedAnnual report
「On the other hand, fixed costs increased in new businesses, including the opening of new employment transition support facilities for people with disabilities and investment in the digital signage business, weighing on earnings.」
The increase in fixed costs associated with opening facilities and investing in new businesses has again actually occurred as an event pressuring revenue. - FY2018-Q1MaterialisedAnnual report
「On the other hand, fixed costs increased in new businesses such as digital signage and employment transition support for people with disabilities, weighing on earnings.」
The upfront burden of fixed costs and other expenses associated with a new business actually occurred as an event that pressured revenue. - FY2017First statedAnnual report
「This may result in additional expenditures, including upfront capital investment, personnel expenses and other costs, reducing profit margins. In addition, when a new service or business is launched, risks specific to that service or business will arise, and if development does not proceed as planned because circumstances differ from expectations or for other reasons, the investment may not be recovered, potentially affecting the Group's results of operations and financial position.」
The company explicitly identifies the risks of upfront expenditures for capital investment and personnel costs associated with the active development of new businesses, lower profit margins, failure to meet plans and inability to recover investments.