Deterioration in Construction Profitability
First written in FY2020. 4 of 9 entries say "Materialised", first in FY2021-Q2. Latest entry: FY2025.
Furukawa Electric moved to the "Worse" side of this theme in 2023, 3 years after the typical company in this theme (2020).
The whole theme swung hardest in 2020: 6 of 10 companies on the "Worse" side.
4 other companies' latest entry also says "Materialised".
- FY2025MaterialisedAnnual report
「A defect occurred in a large-scale power project previously delivered by the Company through its subsidiary, and the Company continued discussions with the customer. The Company's subsidiary and the customer have now agreed to replace the cables for the project and for the subsidiary to bear part of the cost.」
The defect in the large-scale power project resulted in an agreement to replace the cables and allocate the costs, and a provision of ¥4.17 billion was recorded for repair costs. - FY2024MaterialisedAnnual report
「A defect occurred in part of a product used in a large-scale power project previously delivered by the Company, and the Company recorded a provision for repair costs that can currently be reasonably estimated.」
A product defect occurred in a large-scale power project, resulting in the recognition of a provision for repair costs. The Company is investigating the cause and scope of the impact and has also disclosed the possibility of additional repair costs. - FY2024-Q2MaterialisedAnnual report
「Profit declined due to lower revenue and the application of the lower-of-cost-or-market method as large projects were postponed to the following fiscal year and beyond, continued postponement of customer construction projects in China, higher depreciation expenses, and the recognition of product warranty costs.」
The application of the lower-of-cost-or-market method due to the postponement of large projects and the postponement of customer construction projects in China actually occurred, worsening profitability in the energy infrastructure business. - FY2022RestatedAnnual report
「・Strengthen and implement measures to rigorously determine the points at which responsibility for goods and construction is divided, as well as specifications and warranty coverage, conduct project-specific risk analysis, and enter into contracts on reasonable terms ・During the execution phase, reduce risk by appropriately monitoring project progress, profitability, and other factors」
The Company continues to address the risk of deteriorating profitability in construction projects by scrutinizing contract terms, conducting project-specific risk analysis, and monitoring progress and profitability. - FY2022-Q1RestatedAnnual report
「The Company is conducting discussions with a customer regarding the allocation of costs related to schedule delays for a power cable installation project being carried out in the Middle East by an equity-method affiliate. Depending on the status of future negotiations and other factors, this may affect the Company's consolidated results, but it is currently difficult to reasonably estimate the amount of the impact.」
The schedule delay on the power cable installation project in the Middle East and discussions with the customer regarding the allocation of costs are continuing. - FY2021MitigatedAnnual report
「During the execution phase, reducing risk by appropriately monitoring project progress, profitability, and other factors」
While the schedule delay and discussions regarding the allocation of costs for the Middle East project continue, the Company specified management measures including strict verification of contract terms, project-specific risk analysis, and monitoring of progress and profitability. - FY2021-Q3RestatedAnnual report
「The Company has begun discussions with a customer regarding the allocation of costs related to schedule delays for a power cable installation project being carried out in the Middle East by an equity-method affiliate. Depending on the status of future negotiations and other factors, this may affect the Company's consolidated results, but it is currently difficult to reasonably estimate the amount of the impact.」
The schedule delay on the power cable installation project in the Middle East and discussions with the customer regarding the allocation of costs are continuing. - FY2021-Q2MaterialisedAnnual report
「The Company has begun discussions with a customer regarding the allocation of costs related to schedule delays for a power cable installation project being carried out in the Middle East by an equity-method affiliate. Depending on the status of future negotiations and other factors, this may affect the Company's consolidated results, but it is currently difficult to reasonably estimate the amount of the impact.」
In connection with the risk of deteriorating construction profitability, a schedule delay occurred on a power cable installation project in the Middle East, and discussions with the customer regarding the allocation of costs began. - FY2020First statedAnnual report
「If competition for orders with competitors intensifies, or if construction costs rise due to unforeseen costs such as design changes during construction, increases in construction material and labor costs, or additional costs caused by weather conditions such as typhoons in submarine cable installation projects, the profitability of the business may decline.」
For the power business, the Company newly organized the risk of deteriorating construction profitability arising from competition for orders, design changes, material and labor costs, weather conditions, and factors specific to overseas construction projects.