Declining profit margins due to concentrated sales of low-priced, low-margin products
First written in FY2019-Q1. 4 of 19 entries say "Restated". Latest entry: 2026-11-09.
The Hanshin Diesel Works moved to the "Worse" side of this theme in 2020, 3 years before the typical company in this theme (2023).
The whole theme swung hardest in 2017: 3 of 7 companies on the "Worse" side.
4 other companies' latest entry also says "Mitigated".
- FY2026-H1MaterialisedAnnual report
「In terms of profit and loss, results fell below the earnings forecast for the interim accounting period because the increase in purchased equipment with high cost ratios worsened profitability in parts sales, while sales of CMR (casting and metal machining), outside the marine business, declined.」
The increase in purchased equipment with high cost ratios in parts sales, which worsened profitability, and the decline in CMR sales are cited as the reasons results fell below the earnings forecast and as actual factors behind lower margins. - FY2025WorsenedAnnual report
「For main engines, material costs rose and the higher costs could not be fully passed through to prices, while an unexpectedly large provision for loss on order contracts was recognized for 2-cycle electronically controlled engines,」
In addition to higher main-engine costs and delays in passing them through to prices, provisions for loss on order contracts for 2-cycle electronically controlled engines have emerged as specific factors behind lower margins and lower earnings. - FY2025-H1WorsenedAnnual report
「For 2-cycle electronically controlled engines, particularly electronic equipment, imported materials became substantially more expensive than anticipated due to exchange-rate effects. As a result, the company recognized a substantial provision for loss on order contracts covering all projects, including shipments scheduled for the following fiscal year and beyond. This affected results, with operating profit at ¥105 million, down 65.9% year on year, ordinary profit at ¥136 million, down 59.7%, and interim net profit at ¥110 million, down 51.6%.」
Higher imported-material costs and worsening price and cost conditions for 2-cycle electronically controlled engines have materialized in the recognition of provisions for loss on order contracts covering all projects and a substantial decline in earnings. - FY2024-Q3RestatedAnnual report
「In terms of earnings, although higher material costs could not be fully passed through to product prices and depreciation expenses increased due to large-scale capital investment, these effects were offset by increased sales of component parts and CMR (casting and metal machining), outside the marine business.」
The shortfall in passing material costs through to prices and higher depreciation continue to weigh on profits, but this is being offset by higher sales of parts and CMR. - FY2024-Q1RestatedAnnual report
「The company was unable to fully pass higher material costs through to product prices and was unable to offset the increase in depreciation resulting from major capital investment with higher sales of CMR (casting and metal machining), outside the marine business. As a result, operating profit was ¥113 million, down 62.8% year on year, and ordinary profit was ¥122 million, down 60.7%,」
The shortfall in passing material costs through to prices continued, and, combined with higher depreciation, resulted in a substantial decline in earnings. - FY2023WorsenedAnnual report
「We expect the challenging order environment to continue for some time, as the impact of soaring costs for various materials has not yet been fully passed through to product prices and production has declined.」
The decline in main-engine production and the stagnation in passing higher material costs through to prices have coincided, and the company indicates that the order environment will remain difficult. - FY2023-Q1RestatedAnnual report
「The downward trend in forward orders for main engines and the stagnation in price improvements have yet to turn around. In addition, overseas markets for main engines remain sluggish and raw-material prices are high. Although results in the first quarter were relatively favourable, we expect conditions to become challenging from the second quarter onward.」
The decline in main-engine forward orders and the stagnation in price improvements have not improved, and, with stagnation in overseas markets and rising raw-material costs also weighing, the company continues to expect difficult conditions from the second quarter onward. - FY2022MaterialisedAnnual report
「The decline in main-engine forward orders and the stagnation in price improvements have still not improved, and, amid stagnation in overseas markets and rising raw-material costs, we believe conditions will become even more difficult going forward.」
The previous concerns regarding low prices and stagnant price improvements are continuing and becoming more specific in the form of declining main-engine forward orders and a lack of improvement in price conditions. - FY2020DroppedAnnual reportThis filing contains no identifiable statement directly indicating the concentration of sales in low-priced main engines and low-margin parts or the stagnation in price improvements as risks.
- FY2020-Q3WorsenedAnnual report
「Although profits appear likely to be secured for the time being despite the difficult environment, the decline in main-engine forward orders and the stagnation in price improvements have still not improved, and we believe conditions will become even more difficult going forward.」
The company indicates that the decline in main-engine forward orders and the stagnation in price improvements have not improved, and that conditions will become even more difficult than under its previous difficult outlook. - FY2020-Q2RestatedAnnual report
「However, the trend of declining orders and sales volumes for main engines and the stagnation in price improvements remain unchanged, and we believe the situation will become difficult going forward.」
The company reconfirms its view that the decline in main-engine orders and sales volumes and the stagnation in price improvements remain unchanged, and that difficult conditions are expected going forward. - FY2020-Q1MaterialisedAnnual report
「However, the trend of declining orders and sales volumes for main engines and the stagnation in price improvements remain unchanged, and we believe the situation will continue to be difficult going forward.」
The company continues to explicitly identify the ongoing decline in main-engine orders and sales volumes and the stagnation in price improvements as factors contributing to a difficult outlook. - FY2019DroppedAnnual reportThis filing does not directly cite the concentration of sales in low-priced main engines and low-margin parts as a factor behind the decline in earnings. Instead, it cites lower sales volumes for main engines and parts, while securing profits through in-house production and expense reductions.
- FY2019-Q3Profit decline continued, but the decline narrowedAnnual report
「In terms of earnings, as main-engine price levels declined along with sales volumes, the company worked to reduce costs and expenses, while depreciation expenses also declined. Operating profit was ¥615 million, down 7.8% year on year, ordinary profit was ¥640 million, down 7.9%, and quarterly net profit was ¥426 million, down 8.2%.」
Lower sales volume and lower main-engine price levels continue to be factors behind the decline in earnings, but the rate of decrease in operating profit narrowed to 7.8% year on year from 29.9% for the cumulative previous quarter. - FY2019-Q2Lower main-engine price levels continue to be a factor behind the decline in earnings.Annual report
「In terms of earnings, although the company reduced subcontracting costs and focused on other cost reductions, and depreciation expenses declined, due to lower sales volumes of main engines and components and lower main-engine price levels, operating profit was ¥398 million, down 29.9% year on year, ordinary profit was ¥413 million, down 30.2%, and quarterly net profit was ¥284 million, down 28.1%.」
Following the concentration of sales in low-priced main engines and low-margin parts in the previous quarter, the factors cited this time as contributing to the decline in earnings are lower sales volume and lower main-engine price levels. - FY2019-Q1First statedAnnual report
「In terms of earnings, due to the temporary concentration of sales of main engines at low price levels and low-margin components, operating profit was ¥134 million, down 61.9% year on year, ordinary profit was ¥138 million, down 62.3%, and quarterly net profit was ¥96 million, down 61.3%.」
States that the temporary concentration of sales of main engines at low price levels and low-margin components actually occurred and was a factor in the declines in operating profit, ordinary profit and quarterly net profit.