Risk of Insufficient Returns on New Business Investments and Lower Profit Margins
First written in FY2024. 1 of 2 entries say "Mitigated", first in FY2025. Latest entry: FY2025.
The whole theme swung hardest in 2017: 6 of 20 companies on the "Worse" side.
11 other companies' latest entry also says "Mitigated".
- FY2025MitigatedAnnual report
「Because losses arising from new businesses are controlled below a certain amount through budget controls, the likelihood of these risks materialising is not high. However, if they do materialise, the Group's financial position and operating results may be affected.」
For the risks of failing to recoup investment in new businesses and lower profit margins, budget controls were identified as a management measure to keep losses below a certain amount. - FY2024First statedAnnual report
「It is expected to take a certain amount of time and investment before new businesses generate stable earnings, which may lower overall profit margins. In addition, if changes in the business environment or other factors cause a new business to perform differently from its initial plan, the Group may be unable to recoup a sufficient amount of its investment in the new business.」
The risks identified are the ramp-up period and investment burden for new businesses, failure to meet plans and insufficient recovery of investment.