Deteriorating Profitability and Cost Overruns in a Large Bridge Construction Project
First written in FY2016. 20 of 33 entries say "Mitigated", first in FY2017-Q1. Latest entry: FY2026.
TAKADAKIKO(Steel Construction) moved to the "Worse" side of this theme in 2025, 4 years after the typical company in this theme (2021).
The whole theme swung hardest in 2019: 6 of 16 companies on the "Worse" side.
6 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「In the bridge business, the company secured increases in contract prices through design changes, but the impact of lower plant utilization caused by weak orders continuing from the previous fiscal year and rising costs was substantial. Completed construction revenue declined to ¥10,618,883 thousand, down 18.5% from the previous fiscal year, and the segment recorded a loss of ¥451,146 thousand, compared with segment profit of ¥118,779 thousand in the previous fiscal year.」
Lower plant utilization caused by weak orders and rising costs materialized as a loss in the bridge business. - 2026-05-15WorsenedEarnings
「For the fiscal year under review, net sales were ¥14,306 million, down 22.5% year on year, operating loss was ¥440 million, compared with operating income of ¥235 million in the previous fiscal year, ordinary loss was ¥301 million, compared with ordinary income of ¥360 million, and net loss attributable to the fiscal year was ¥535 million, compared with net income of ¥343 million.」
Deteriorating profitability was reflected in company-wide results as sales declined and the company moved into operating loss. - FY2025WorsenedAnnual report
「Rising costs caused by labor shortages and higher costs generally, together with the impact of accepting projects with tight profitability to secure sufficient plant workload, caused gross profit on completed construction to deteriorate to ¥1,926,523 thousand, down 33.4% from the previous fiscal year, while operating profit was ¥235,330 thousand, down 82.5%.」
The impact of rising costs and newly accepted projects with tight profitability emerged in the results, with segment profit in the bridge business declining 92.5% from the previous fiscal year and company-wide operating profit declining 82.5%. - FY2025-H1MaterialisedAnnual report
「In terms of earnings, profitability in the steel structures business improved following a review of the production structure, but the impact was limited. Results were significantly below the same period of the previous year because of lower plant utilization resulting from weak orders in the bridge business during the previous fiscal year and the current interim accounting period, costs that exceeded expectations, and the impact of new orders with weak profitability. Revenue in the bridge business during the interim accounting period was ¥6,547,328 thousand, down 13.0% year on year, and segment profit was ¥94,095 thousand, down 90.8% year on year.」
Costs exceeding expectations and new orders with weak profitability affected actual results, and segment profit in the bridge business declined 90.8% year on year. - FY2024MitigatedAnnual report
「In the bridge business, projects on hand progressed smoothly, and increases in contract amounts resulting from design changes were secured for projects completed at the fiscal year-end. As a result, completed construction revenue increased to ¥15,619,450 thousand, up 17.3% year on year, and segment profit was ¥1,578,388 thousand, up 183.7%, significantly exceeding the previous fiscal year.」
Segment profit in the bridge business rose 183.7% from the previous fiscal year, supported by smooth progress on carried-over projects and increases resulting from design changes. Factors behind the deterioration in profitability on large bridge construction projects were mitigated during the fiscal year. - FY2024-Q2MitigatedAnnual report
「In the bridge business, completed construction revenue was constrained by extensions to the schedules of several projects. However, the number of projects with improved profitability increased through effective use of owned equipment, resulting in a significant improvement in gross profit from completed construction compared with the same quarter of the previous year.」
In the bridge business, completed construction revenue was constrained by extensions to project schedules, while the number of more profitable projects increased through effective use of owned equipment. Segment profit improved from ¥270,238 thousand in the same period of the previous year to ¥1,018,614 thousand. - FY2024-Q1MitigatedAnnual report
「Revenue in the bridge business was ¥3,497,706 thousand for the three-month period, up 12.9% year on year, and segment profit was ¥427,563 thousand, compared with a segment loss of ¥162,247 thousand in the same period of the previous year.」
The bridge business turned from a loss in the same period of the previous year to segment profit of ¥427,563 thousand. The smooth progress of carried-over projects mitigated the factors behind deteriorating profitability in bridge construction during the quarter. - FY2023MaterialisedAnnual report
「Although orders remained solid in both the bridge and steel structures businesses during the fiscal year, relatively few projects contributed to production activity during the year. Completed construction revenue therefore increased only slightly to ¥15,978,699 thousand, up 2.0% from the previous fiscal year.」
Completed construction revenue increased because large unprofitable projects emerged, while operating profit declined 50.9% from the previous fiscal year. Profitability in the bridge business also deteriorated more than expected, and segment profit declined 45.4%. - FY2023-Q3MaterialisedAnnual report
「In terms of earnings, the improvement in profitability in the steel structures business was insufficient to offset the stagnation in profit growth in the bridge business caused by costs running ahead of revenue. Although the company secured operating income, quarterly net income was approximately half the level of the same period of the previous year.」
Profit growth in the bridge business stagnated because costs ran ahead of revenue, and the factors behind the deterioration in profitability on large bridge construction projects previously disclosed by the company re-emerged in the results. - FY2023-Q2MitigatedAnnual report
「In terms of earnings, projects on hand progressed smoothly amid rigorous cost control, and the bridge business's gross profit margin improved compared with the cumulative first quarter. As a result, the company emerged from a loss-making position and secured operating profit.」
The gross margin in the bridge business improved through cost control and progress on carried-over projects, allowing the business to emerge from the loss recorded in the first quarter. Factors behind the deterioration in profitability associated with large bridge construction projects were mitigated during the quarter. - FY2023-Q1MaterialisedAnnual report
「In terms of earnings, costs ran ahead on several bridge business projects, and the results were reported before increases in contract prices through design changes had been determined. As a result, the gross margin in the bridge business declined, and the company was unable to secure operating income.」
Costs ran ahead in the bridge business, and the gross margin declined because increases in contract prices through design changes had not yet been determined, causing the factors behind deteriorating profitability to appear as an actual loss. - FY2022-Q3MitigatedAnnual report
「Revenue in the bridge business was ¥8,875,844 thousand for the nine-month period, down 0.6% year on year, and segment profit was ¥649,209 thousand, up 58.7% year on year.」
Segment profit in the bridge business rose 58.7% year on year, and the factors behind the deterioration in profitability on large bridge construction projects that had emerged in the past remained mitigated during the quarter. - FY2022-Q2MitigatedAnnual report
「In the bridge business, the company secured increases in contract prices through design changes on several projects at completion, which contributed to improved results.」
The company secured increases in contract prices through design changes on several projects, and segment profit in the bridge business rose 153.3% year on year. Factors behind the deterioration in profitability on large bridge construction projects were mitigated during the quarter. - FY2022-Q1MitigatedAnnual report
「In terms of earnings, increases in contract amounts resulting from design changes in the bridge business made a significant contribution to performance, and the steel structures business also began to show the results of its turnaround efforts. As a result, operating profit for the first quarter nearly reached the full-year operating profit forecast.」
In the bridge business, increases in contract prices through design changes contributed to improved profitability, and segment profit turned from a loss of ¥108,020 thousand in the same period of the previous year to profit of ¥530,214 thousand. - FY2021MitigatedAnnual report
「In the bridge business, the impact of sluggish orders in the fiscal year before last continued, while progress on individual projects also remained stalled. Completed construction revenue therefore declined to ¥13,659,238 thousand, down 11.3% year on year. However, increases in contract prices through design changes on projects completed at the end of the fiscal year enabled segment profit to exceed the previous fiscal year, reaching ¥1,226,692 thousand, up 2.9% year on year.」
While the bridge business experienced stalled project progress and lower revenue, increases in contract prices through design changes lifted profit above the previous year, mitigating the factors behind the past deterioration in profitability during the fiscal year. - FY2021-Q2MaterialisedAnnual report
「In terms of earnings, neither the bridge business nor the steel structures business had a sufficient order backlog at the end of the previous fiscal year. In addition, progress stalled on some bridge business projects because of the impact of construction work related to other companies, and revenue fell short of the target.」
Progress stalled on some bridge business projects because of the impact of construction work related to other companies, and revenue fell short of the target. - FY2021-Q1MaterialisedAnnual report
「In terms of earnings, revenue declined because progress stalled on some bridge business projects, while profitability deteriorated on large projects as costs ran significantly ahead of revenue.」
Progress stalled on some bridge business projects, and profitability deteriorated on large projects as costs ran ahead of revenue. Factors behind the deterioration in profitability on large bridge construction projects, which had previously been mitigated, have re-emerged in the results during the quarter. - FY2020-Q3MitigatedAnnual report
「Revenue in the bridge business was ¥11,102,634 thousand for the nine-month period, up 3.2% year on year, and segment profit was ¥666,880 thousand, up 21.7% year on year.」
Segment profit in the bridge business rose 21.7% year on year, and the deterioration in profitability on large bridge construction projects that had emerged in the past remained mitigated. - FY2020-Q2MitigatedAnnual report
「Revenue in the bridge business was ¥7,404,805 thousand for the six-month period, up 5.7% year on year, and segment profit was ¥383,472 thousand, up 2.4% year on year.」
Profit in the bridge business rose 2.4% year on year, while cost reductions and improved profitability also progressed. The risk of deteriorating profitability on large bridge construction projects, which had emerged in the past, remained mitigated. - FY2020-Q1MitigatedAnnual report
「In terms of earnings, production on projects carried over from the previous fiscal year progressed smoothly in both the bridge and steel structures businesses, reducing costs and improving profitability.」
Carried-over projects progressed smoothly in both the bridge and steel structures businesses, leading to cost reductions and improved profitability. The risk of deteriorating project profitability that had emerged in the past was mitigated during the quarter. - FY2019MaterialisedAnnual report
「However, many projects had not yet finalized additional contracts resulting from design changes, and costs were incurred ahead of revenue. Consequently, segment profit was limited to ¥863,217 thousand, up 0.2% year on year.」
Many projects in the bridge business had not yet finalized additional contracts resulting from design changes, and costs incurred ahead of revenue limited the improvement in profit. - FY2019-Q3MaterialisedAnnual report
「For projects scheduled for completion at fiscal year-end, costs were incurred ahead of revenue while increases in contract prices through design changes had not yet been determined, resulting in somewhat subdued profitability in the bridge business.」
Costs ran ahead in the bridge business, and increases in contract prices through design changes had not yet been determined, resulting in constrained profitability. Some of the factors behind the previously mitigated deterioration in profitability have begun to appear in the results. - FY2019-Q2MitigatedAnnual report
「Profitability in the bridge business improved as carried-over projects progressed smoothly in both fabrication and erection, reducing costs, and contract prices were increased through design changes.」
Smooth progress on carried-over projects, cost reductions and increases in contract prices through design changes further mitigated the risk of deteriorating profitability in bridge construction. Segment profit in the bridge business was ¥374,546 thousand, up 44.6% year on year. - FY2019-Q1MitigatedAnnual report
「Revenue in the bridge business was ¥3,226,119 thousand for the three-month period, up 23.6% year on year, and segment profit was ¥191,567 thousand, up 203.1% year on year.」
Segment profit in the bridge business was ¥191,567 thousand, up 203.1% year on year. The risk of deteriorating profitability on large bridge construction projects, which had emerged in the past, was also mitigated in the quarter. - FY2018MitigatedAnnual report
「Revenue in the bridge business increased only slightly to ¥13,066,292 thousand, up 4.2% year on year. However, supported by a sufficient order backlog at the end of the previous fiscal year and solid orders during the fiscal year, both plant fabrication and on-site construction progressed smoothly, while increases in the value of completed projects resulting from design changes exceeded expectations. As a result, segment profit improved significantly to ¥861,314 thousand, up 126.1% year on year.」
In the bridge business, segment profit rose 126.1% year on year, supported by the order backlog, solid orders, progress in plant fabrication and on-site construction, and increases resulting from design changes, further mitigating the deterioration in profitability previously seen in bridge construction. - FY2018-Q3MitigatedAnnual report
「The bridge business recorded segment profit of ¥813,138 thousand for the nine-month period, up 239.9% year on year.」
Segment profit in the bridge business rose 239.9% year on year, and the mitigation of the risk of deteriorating profitability that had emerged on large bridge construction projects and elsewhere continued. - FY2018-Q2MitigatedAnnual report
「The bridge business recorded segment profit of ¥258,986 thousand for the six-month period, up 21.5% year on year.」
Segment profit in the bridge business rose 21.5% year on year, and the mitigation of the risk of deteriorating profitability that had emerged on large bridge construction projects and elsewhere continued. - FY2018-Q1MitigatedAnnual report
「In terms of earnings, profitability in the bridge business improved as projects carried over from the previous fiscal year progressed smoothly and contract prices were increased through design changes on projects completed during the quarter.」
Progress on projects carried over from the previous fiscal year and increases in contract prices through design changes improved profitability in the bridge business, further mitigating the risk of deteriorating profitability that had emerged on large bridge construction projects and elsewhere. - FY2017AdvancedAnnual report
「In terms of earnings, the bridge plant maintained a high operating rate throughout the year against a backdrop of the order backlog at the end of the previous fiscal year, while on-site construction also progressed smoothly, resulting in a significant improvement in bridge business profitability from the previous fiscal year.」
The bridge business recorded full-year segment profit of ¥380,956 thousand, moving into the black from a segment loss in the previous year. - FY2017-Q3MitigatedAnnual report
「In terms of earnings, the bridge plant maintained a high operating rate throughout the year, while on-site construction also progressed smoothly, allowing profitability in the bridge business to remain solid.」
The bridge plant's high operating rate and smooth progress in on-site construction supported solid profitability in the bridge business. - FY2017-Q2MitigatedAnnual report
「In the bridge business, projects carried over from the previous fiscal year progressed smoothly, leading to improved profitability.」
Profitability in the bridge business improved as carried-over projects progressed, and the business secured segment profit for the six-month period. - FY2017-Q1MitigatedAnnual report
「In the bridge business, profitability improved as the bridge plant made steady progress on projects carried over from the previous fiscal year.」
The company stated that profitability, which had deteriorated on large bridge construction projects and elsewhere, improved as carried-over projects progressed. However, the bridge business still recorded a segment loss of ¥24,293 thousand in the quarter. - FY2016First statedAnnual report
「Labor costs rose sharply, and procurement costs for materials and equipment substantially exceeded initial estimates, resulting in financial results reflecting a significant deterioration in profitability and the inability to secure operating income.」
The company explained that rising labor, materials and equipment costs on a large bridge construction project undertaken by a joint venture actually led to deteriorating profitability and an operating loss.