Earnings volatility risk from project-based, labor-intensive operations
First written in FY2016. 12 of 29 entries say "Materialised", first in FY2018-Q1. Latest entry: 2026-08-07.
No other company in this theme has enough history to compare yet.
- FY2026-H1WorsenedAnnual report
「The steelmaking business reported revenue of ¥604 million, down 17.3% year on year, as sales to major customers declined from the same period of the previous year. The segment posted a loss of ¥48 million, compared with a loss of ¥2 million in the same period of the previous year, owing in part to the provision for loss on orders received, and the loss widened.」
Profitability volatility associated with the project-based business materialized through the recognition of provisions for losses on orders. The balance of provisions for losses on orders also increased from ¥547 million at the end of the previous fiscal year to ¥612 million, putting further pressure on earnings. - 2026-05-11MaterialisedResults
「一部の案件の採算性悪化に伴い受注損失引当金が損益に与える影響が想定以上になる可能性」
受注損失引当金の繰入額が当中間期に64百万円増加し、案件採算の悪化影響が継続して損益に現れている。 - FY2025MaterialisedAnnual report
「Operating profit in the valve business fell below the previous consolidated fiscal year because provisions for losses on orders were recognized following a remeasurement, while sales from periodic inspection work at nuclear power plants and overseas projects declined, among other factors.」
Provisions for losses on orders were actually recognized, and the consolidated balance of provisions increased from ¥327 million to ¥547 million. The profitability volatility risk of the project-based business materialized in earnings. - FY2024-Q2RestatedAnnual report
「During the first six months of the fiscal year, there were no newly emerging business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」
No new developments or material changes were identified regarding the performance volatility risk associated with project-based, labor-intensive operations. - FY2024-Q1RestatedAnnual report
「During the first quarter of the fiscal year, there were no newly emerging business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」
No new developments or material changes were identified regarding the performance volatility risk associated with project-based, labor-intensive operations. - FY2023-Q3MaterialisedAnnual report
「Assets at the end of the third quarter of the current consolidated fiscal period totaled ¥13,442 million, an increase of ¥467 million from the end of the previous consolidated fiscal year. This was mainly because work in process increased by ¥401 million and investment securities increased by ¥522 million, although cash and deposits decreased by ¥539 million.」
Work in process, which reflects the divergence between the timing of orders and production and the timing of revenue recognition in the project-based business, increased by ¥401 million from the end of the previous fiscal year, and the timing gap between project completion and revenue recognition continued to affect results. - FY2023-Q2MaterialisedAnnual report
「In terms of profitability, sales related to nuclear power increased in the valve business, including periodic inspection work, while inventories, including work in process, accumulated for projects whose delivery dates fell in or after the third quarter,」
Work in process and other inventories accumulated for construction projects whose delivery dates fell in or after the third quarter, and the divergence between the timing of orders and production and the timing of revenue recognition continued to affect results. Inventories increased by ¥343 million year on year. - FY2023-Q1MaterialisedAnnual report
「In terms of profitability, sales related to nuclear power increased in the valve business, including periodic inspection work at Kansai Electric Power's Takahama Nuclear Power Station Unit 4. Inventories, including work in process, also accumulated for construction projects whose delivery dates fell in or after the second quarter. Operating loss was ¥197 million, compared with a loss of ¥304 million in the same period of the previous year.」
Work in process accumulated for construction projects whose delivery dates fell in or after the second quarter, and the timing difference between orders and production and revenue recognition continued to affect performance. The operating loss narrowed as sales increased, but the company remained in the red. - FY2022-Q3MaterialisedAnnual report
「In the core valve business, periodic inspection work at Kyushu Electric Power's Sendai Nuclear Power Station Unit 1 was completed and recognized as revenue, but there were no other major revenue-generating projects. As a result of working mainly on projects for nuclear power plants whose delivery dates fell in or after the fourth quarter, total sales were weak at ¥5,506 million, down 32.3% year on year.」
In the project-based business, the divergence between the timing of orders and production and the timing of revenue recognition appeared as a shortage of major revenue-generating projects and a 32.3% year-on-year decline in sales. - FY2022-Q2MaterialisedAnnual report
「With no other major revenue-generating projects, the company worked mainly on projects for nuclear power plants whose delivery dates fell in or after the third quarter. As a result, total sales were weak at ¥3,953 million, down 37.1% year on year.」
In the project-based business, the divergence between the timing of orders and production and the timing of revenue recognition appeared as a shortage of major revenue-generating projects and a 37.1% year-on-year decline in sales. - FY2022-Q1MaterialisedAnnual report
「There were no major revenue-generating projects in the core valve business. As a result of working mainly on projects for nuclear power plants whose delivery dates fell in or after the second quarter, total sales were weak at ¥1,341 million, down 28.1% year on year.」
In the project-based business, the divergence between the timing of orders and production and the timing of revenue recognition appeared in the quarter as a shortage of major revenue-generating projects and a 28.1% year-on-year decline in sales. - FY2021-Q3RestatedAnnual report
「There were no newly arising business or other risks during the nine-month period ended in the third quarter of the current fiscal year. In addition, there were no significant changes to the business or other risks described in the annual securities report for the previous fiscal year.」
No new developments or material changes were identified regarding the performance volatility risk associated with project-based, labor-intensive operations. - FY2021-Q2RestatedAnnual report
「No new business or other risks arose during the 2nd quarter cumulative period. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」
No new developments or material changes were identified regarding the performance volatility risk associated with project-based, labor-intensive operations. - FY2020RestatedAnnual report
「The contraction of the business also magnifies the relative impact on performance of provisions for losses on orders required after accepting loss-making projects and changes in capacity utilization, making it difficult to stabilize profit margins. How to control these factors and link them to stable performance is also an important ongoing challenge.」
The company reaffirmed as ongoing management challenges the risks of fluctuations in provisions for losses on orders, capacity utilization and profit margins arising from its project-based business structure and high fixed-cost burden. - FY2020-Q3Earnings improvement continued as nuclear power projects were recognized as revenueAnnual report
「Under these conditions, during the nine months ended the third quarter, periodic inspection work was completed and recognized as revenue at Kansai Electric Power's Oi Nuclear Power Station Unit 4 and Takahama Nuclear Power Station Unit 4, and Kyushu Electric Power's Genkai Nuclear Power Station Unit 4 and Sendai Nuclear Power Station Units 1 and 2, among other projects,」
In the project-based business, periodic inspection work at several nuclear power stations was completed and recognized as revenue, and the divergence between the timing of orders and production and the timing of revenue recognition this time appeared as higher revenue and higher profit. - FY2020-Q2Earnings improvement continued as nuclear power projects were recognized as revenueAnnual report
「During the six months ended the second quarter, periodic inspection work was completed and recognized as revenue at Kansai Electric Power's Oi Nuclear Power Station Unit 4 and Takahama Nuclear Power Station Unit 4, and Kyushu Electric Power's Genkai Nuclear Power Station Unit 4 and Sendai Nuclear Power Station Units 1 and 2, among other projects,」
Projects including periodic inspection work at nuclear power stations were recognized as revenue, and the performance of the project-based business, with its divergence between the timing of orders and production and the timing of revenue recognition, appeared this time as higher revenue and higher profit. - FY2020-Q1Earnings improved as work-in-process projects were recognized as revenueAnnual report
「During the three months ended the first quarter, sales increased because work-in-process projects from the previous consolidated fiscal year were recognized as revenue, resulting in a substantial increase in profit.」
Work-in-process projects from the previous consolidated fiscal year were recognized as revenue during the quarter, and the divergence between the timing of orders and production and the timing of revenue recognition this time appeared as higher revenue and higher profit. - FY2019WorsenedAnnual report
「The balance of provisions for losses on orders recognized in connection with accepting loss-making projects increased by ¥130 million from the end of the previous consolidated fiscal year, putting pressure on profitability.」
The balance of provisions for losses on orders increased by ¥130 million, from ¥321 million to ¥451 million. Performance volatility risks arising from unprofitable projects and the divergence between the timing of orders and the timing of revenue recognition continued to put pressure on earnings. - FY2019-Q3MaterialisedAnnual report
「Due to insufficient sales, operating profit was a loss of ¥301 million, compared with a profit of ¥285 million in the same period of the previous year; ordinary profit was a loss of ¥247 million, compared with a profit of ¥316 million; and profit attributable to owners of the parent was a loss of ¥264 million, compared with a profit of ¥281 million. Profit declined substantially year on year because provisions for losses on orders were recognized after the company accepted new loss-making projects.」
The company accepted new loss-making projects, and provisions for losses on orders were actually recognized. The balance of provisions for losses on orders increased by ¥217 million, from ¥321 million to ¥539 million, demonstrating that the risk associated with project-based operations and a high fixed-cost burden had materialized in earnings. - FY2019-Q2WorsenedAnnual report
「The reason for higher revenue but lower profit than in the same period of the previous year was that, in the previous year, the reversal of provisions for losses on orders and a substantial increase in inventories, mainly work in process, had a positive effect on earnings. During the six months ended the second quarter, inventories, mainly work in process, also increased, but provisions for losses on orders exceeded reversals, resulting in lower profit despite higher revenue.」
The divergence between the timing of orders and production and the timing of revenue recognition, together with the impact of provisions for losses on unprofitable projects, again affected earnings, with both the operating loss and ordinary loss expanding despite higher revenue. - FY2018MaterialisedAnnual report
「Because the Group's businesses are primarily entirely make-to-order, the concentration of revenue recognition in particular periods and the longer time required to complete products tend to cause fluctuations in cash flow from operating activities.」
The divergence between the timing of revenue recognition and the work-in-process period associated with entirely make-to-order production continued, and cash flow from operating activities was an outflow of ¥672 million. - FY2018-Q2MaterialisedAnnual report
「Under these conditions, during the six months ended the second quarter, orders and production of valve products were extremely strong, but few had reached revenue recognition because of delivery schedules. In addition, orders and sales related to valve maintenance and the steelmaking business remained sluggish, leaving sales at ¥2,968 million, down 22.8% year on year.」
The divergence between the timing of orders and production and the timing of revenue recognition continued in the project-based business, with strong orders and production nevertheless resulting in weak sales. Inventories, including work in process, increased by ¥511 million. - FY2018-Q1MaterialisedAnnual report
「Although production of valves already on order was extremely strong, there were no major revenue-generating projects in the core valve business. As a result of working mainly on projects whose delivery dates fell in or after the second quarter, including periodic inspection work at Shikoku Electric Power's Ikata Nuclear Power Station Unit 3 and manufacturing valves for thermal power plants in Indonesia and South Korea, sales were extremely weak at ¥1,136 million, down 34.5% year on year.」
In the project-based business, the timing of orders and production diverged from the timing of revenue recognition, and the absence of major revenue-generating projects resulted in a substantial decline in revenue and an operating loss. The company explained that a potentially substantial loss was avoided through gains from the reversal of provisions for losses on orders, among other factors. - FY2017RestatedAnnual report
「The company faced extremely challenging conditions, including the recognition of new provisions for losses on orders after accepting unprofitable projects to maintain factory utilization during the consolidated fiscal year and going forward,」
The performance volatility risk associated with project-based, labor-intensive operations continued, and the company also disclosed the recognition of new provisions for losses on orders following the acceptance of unprofitable projects. - FY2017-Q3WorsenedAnnual report
「Profitability was also extremely challenging. Amid sluggish revenue growth, provisions for losses on new orders increased after the company accepted unprofitable projects to maintain factory utilization, among other reasons,」
The company continued accepting unprofitable projects to maintain factory utilization, while provisions for losses on new orders continued to increase. Provisions for losses on orders stood at ¥606 million at the end of the third quarter, demonstrating that the risks associated with project-based operations and a high fixed-cost burden had materialized. - FY2017-Q2WorsenedAnnual report
「Profitability was also extremely challenging. In addition to sluggish revenue growth, the company increased provisions for losses on new orders after accepting unprofitable projects to maintain factory utilization, among other reasons,」
The company stated that provisions for losses on new orders increased because it accepted unprofitable projects to maintain factory utilization, demonstrating that the performance volatility risk associated with project-based operations and a high fixed-cost burden had materialized. - FY2016First statedAnnual report
「A project-based business model without make-to-stock production or recurring maintenance contracts is affected by fluctuations in inventories arising from the order situation at any given time. Because these production and service activities are labor-intensive and fixed costs account for a large proportion of costs, profits are highly sensitive to changes in revenue, making it difficult to stabilize performance.」
The company identified its project-based, labor-intensive business structure and high fixed-cost burden as factors preventing earnings stabilization. In the same section, it also referred to a decline of more than 20% in sales since the Fukushima Daiichi nuclear accident.