Unprofitable Projects and Product and Service Defects
First written in FY2016. 4 of 11 entries say "Materialised", first in FY2017. Latest entry: 2026-07-29.
Nec moved to the "Worse" side of this theme in 2017.
0 other companies' latest entry also says "Mitigated".
- 2026-07-29MitigatedFinancial Results Presentation
「Overseas: Profit growth driven by continued profitability improvements and curbs on unprofitable projects」
Continued profitability improvements and curbs on unprofitable projects were identified as factors behind profit growth in overseas IT services, with the response to risks associated with unprofitable projects reflected in results. - FY2026RestatedAnnual report
「The operation of the frameworks for quality and safety and project management is closely related to the NEC Group's business continuity and social reputation, and inadequate management of these areas could pose a risk to management.」
The risks concerning unprofitable projects and product defects continue to be treated as priority risks requiring focused measures in quality, safety, and project management, including the global supply chain. - FY2025ReframedAnnual report
「Among these, the NEC Group identified “providing appropriate products and services” as a priority risk requiring focused measures, and “cybersecurity,” “respect for human rights,” “the occurrence of serious misconduct,” and “human capital management” as important risks, in descending order of importance,」
The previous risk concerning unprofitable projects and product defects was reorganized as the priority risk requiring focused measures of “providing appropriate products and services,” including quality and safety, the supply chain, and maintaining trust. - FY2023MitigatedAnnual report
「Adjusted operating profit increased by ¥8.1 billion from the previous consolidated fiscal year to ¥67.3 billion, due to higher revenue and a reduction in unprofitable projects, among other factors.」
In the Social Infrastructure business, the reduction in unprofitable projects contributed to the improvement in adjusted operating profit, which increased to ¥67.3 billion. - FY2023-Q3MitigatedAnnual report
「Adjusted operating profit and loss improved by ¥7.3 billion year on year to a profit of ¥38.1 billion, due to higher revenue and measures including restraining unprofitable projects.」
In the Social Infrastructure business, the reduction in unprofitable projects continued to be identified as a factor behind the improvement in adjusted operating profit, with the improvement amounting to ¥7.3 billion year on year. - FY2023-Q2MitigatedAnnual report
「Adjusted operating profit and loss improved by ¥4.9 billion year on year to a profit of ¥22.0 billion, due to higher revenue and measures including restraining unprofitable projects.」
In the Social Infrastructure business, the reduction in unprofitable projects was identified as a factor behind the improvement in adjusted operating profit, indicating that measures to address the risk were reflected in financial results. However, it was not stated that the risk of unprofitable projects across the company had disappeared. - FY2019MaterialisedAnnual report
「Operating profit in the Network Services business deteriorated by ¥4.1 billion year on year to ¥13.1 billion, despite improved profitability in network infrastructure, due to losses recorded on certain IT services projects, the recognition of business structure improvement expenses, and other factors.」
Losses arose on a specific IT services project, while impairment losses of ¥2,941 million on goodwill in the global business and other items were also recorded. The decline in the profitability of unprofitable projects and assets is reflected in financial results. - FY2019-Q3MaterialisedAnnual report
「Operating profit in the Public business improved by ¥7.7 billion year on year to ¥27.8 billion, despite the recognition of business structure improvement expenses, due to increased revenue and a reduction in unprofitable projects.」
Unprofitable projects declined in the Public business, while losses were recorded on certain IT services projects in the Network Services business. The risk of unprofitable projects continues to be reflected in financial results. - FY2019-Q2MaterialisedAnnual report
「Revenue from the Network Services business increased by ¥2.8 billion, or 1.6%, year on year to ¥176.0 billion, mainly because network infrastructure increased despite a decline in IT services. Operating profit increased by ¥2.1 billion year on year to ¥3.4 billion, as improved profitability in network infrastructure was more than offset by losses recorded on certain IT services projects and other factors.」
Losses arose on certain IT services projects, causing operating profit in the Network Services business to deteriorate by ¥2.1 billion year on year. The risk of unprofitable projects has materialized. - FY2017MaterialisedAnnual report
「We strengthened our project risk management framework to limit unprofitable projects. As a result, losses related to IT projects in the Public business and overseas projects in the Telecom Carrier business declined, but new losses arose in the social infrastructure area of the Public business and in overseas projects in other businesses.」
Regarding the risk of unprofitable projects, the company disclosed the occurrence of new losses alongside the reduction in existing losses. - FY2016First statedAnnual report
「To prevent product or service defects and unprofitable projects, the NEC Group thoroughly manages project risks from the start of sales negotiations when undertaking projects such as system development, including confirming the status of system requirements, understanding technical complexity, and controlling the quality of the hardware and software comprising the system. However, it is difficult to prevent these issues completely.」
The increase in unprofitable projects and the occurrence of unprofitable projects overseas are also reflected in the explanations of financial performance.