Breach of Financial Covenants and Material Doubt Regarding Going Concern
First written in FY2018. 4 of 13 entries say "Restated". Latest entry: FY2023.
The whole theme swung hardest in 2022: 4 of 13 companies on the "Worse" side.
3 other companies' latest entry also says "Dropped".
- FY2023DroppedAnnual report
「The risks that we recognize could materially affect the Group’s operating performance, financial condition and share price are as follows.」
The current filing contains no separate disclosure regarding the substantial doubt or material uncertainty regarding the going-concern assumption that had been reported through the previous fiscal year. - FY2022-Q2AchievedAnnual report
「In addition to these measures, the rapid recovery in shipping markets provided a tailwind, and we recorded operating income of ¥760 million and ordinary income of ¥767 million during the current second quarter cumulative consolidated period, resulting in a substantial improvement in profitability. Financially, cash on hand increased by ¥1,184 million from the end of the previous consolidated fiscal year to ¥1,675 million, exceeding borrowings of ¥1,099 million due for repayment within 1 year. In light of the above, we have determined that the events or circumstances that could raise substantial doubt about the going-concern assumption have been resolved because concerns regarding future cash management have been dispelled.」
The company has determined that the events or circumstances that had continued through the previous quarter and raised substantial doubt about the going-concern assumption have been resolved as a result of improved profitability and increased cash on hand. - FY2022-Q1Material uncertainty continues despite improved performance and cash on hand.Annual report
「As a result of measures taken to capture the rapid recovery in shipping markets, we recorded operating income and ordinary income during the current first quarter cumulative consolidated period, and cash on hand also increased substantially. However, borrowings due for repayment within 1 year continue to substantially exceed cash on hand, and, given the potential for a correction in shipping markets going forward, concerns regarding future cash management have not been completely dispelled. Material uncertainty regarding the going-concern assumption is recognized at this time.」
Although the recovery in market conditions resulted in income and increased cash on hand, material uncertainty regarding the going-concern assumption continues to be recognized because of the short-term repayment burden and the potential for a correction in market conditions. - FY2021RestatedAnnual report
「The Group has continued to record operating losses and ordinary losses during the current consolidated fiscal year. In addition, borrowings due for repayment within 1 year (¥1,908.524 million) substantially exceed cash on hand (¥491.311 million). …Material uncertainty regarding the going-concern assumption is recognized at this time.」
The company determines that substantial doubt and material uncertainty regarding the going-concern assumption continued at fiscal year-end. It specifically indicates that operating and ordinary losses continued and that borrowings due within 1 year exceeded cash on hand. - FY2021-Q3RestatedAnnual report
「However, given the prolonged downturn in shipping markets and the impending resumption of principal repayments on borrowings, concerns regarding cash management after the repayment deferral have not been dispelled. We therefore continue to determine that events or circumstances exist that could raise substantial doubt about the going-concern assumption.」
Even after implementing repayment deferrals, obtaining new working capital borrowings, selling real estate and ocean-going vessels, and repaying interest-bearing debt, concerns about the downturn in shipping markets and cash management after the resumption of repayments remain. The company continues to determine that substantial doubt regarding the going-concern assumption exists. - FY2021-Q2Uncertainty regarding the going-concern assumption persists even after measures have been implemented.Annual report
「However, given the prolonged downturn in shipping markets and the impending resumption of principal repayments on borrowings, concerns regarding cash management after the repayment deferral have not been dispelled. We therefore continue to determine that events or circumstances exist that could raise substantial doubt about the going-concern assumption.」
Although the company implemented repayment deferrals, obtained new working capital borrowings and sold one property, concerns about the prolonged downturn in shipping markets and cash management after the resumption of repayments have not been dispelled, and it states that material uncertainty regarding the going-concern assumption continues to exist. - FY2021-Q1WorsenedAnnual report
「However, even after taking the measures described above, future business conditions and the status of discussions with financial institutions could materially affect cash liquidity going forward. Accordingly, material uncertainty regarding the going-concern assumption is recognized at this time.」
Although previous disclosures had stated that no material uncertainty existed, the company states that material uncertainty is recognized this quarter because of the potential impact on cash liquidity. - FY2020-Q3MaterialisedAnnual report
「During the current third quarter cumulative consolidated period, cash outflows related to investments, including new vessel construction and ballast water treatment systems required by environmental regulations, substantially exceeded cash inflows from operating activities, and low cash liquidity has continued. In light of this situation, we reviewed our funding plan in connection with the quarterly results and recognize that, as of the end of the current third quarter, events or circumstances exist that could raise substantial doubt about the going-concern assumption.」
Regarding the substantial doubt about the going-concern assumption that had been stated as resolved in FY2019, the company recognizes that relevant events or circumstances had arisen again as of the end of the current third quarter because of front-loaded investment spending and lower cash liquidity. However, after considering its unpledged assets and relationships with financial institutions, it has determined that no material uncertainty exists. - FY2019MitigatedAnnual report
「As a result, the substantial doubt regarding the going-concern assumption that existed at the end of the previous consolidated fiscal year, including the recording of ordinary losses for 2 consecutive fiscal years, has been resolved.」
It states that operating income, ordinary income and net income attributable to owners of the parent all turned positive, resolving the substantial doubt regarding the going-concern assumption that existed at the end of the previous fiscal year. - FY2019-Q3RestatedAnnual report
「In light of these circumstances, we have determined that no material uncertainty exists regarding the going-concern assumption, but will continue working to maintain and expand stable earnings and reduce costs.」
While circumstances raising substantial doubt remain, including breaches of financial covenants, the company continues to determine that no material uncertainty exists and to maintain and expand stable earnings and reduce costs. - FY2019-Q2RestatedAnnual report
「In light of these circumstances, we have determined that no material uncertainty exists regarding the going-concern assumption, but will continue working to maintain and expand stable earnings and reduce costs.」
Although circumstances raising substantial doubt remain, including breaches of financial covenants, the company continues to determine that no material uncertainty exists in light of operating and ordinary profits for the first 2 quarters on a cumulative basis. - FY2019-Q1MitigatedAnnual report
「Although events or circumstances that could raise substantial doubt about the going-concern assumption exist, we have worked to recover performance by maintaining and expanding stable earnings and reducing costs, primarily in our core ocean-going shipping business. As a result, we recorded operating income of ¥203.622 million and ordinary income of ¥193.501 million for the current first quarter cumulative consolidated period, and expect to be profitable for the full fiscal year. In light of these circumstances, we have determined that no material uncertainty exists regarding the going-concern assumption.」
Although it states that circumstances raising substantial doubt remain, including breaches of financial covenants, it determines that no material uncertainty exists regarding the going-concern assumption in light of quarterly operating and ordinary profits and the expected full-year profit. - FY2018First statedAnnual report
「The Group’s business environment has been on a gradual recovery from the prolonged downturn in shipping markets. Operating revenue was ¥5,011 million, operating loss was ¥151 million, ordinary loss was ¥265 million, and net loss attributable to owners of the parent was ¥10 million, representing an improvement from the previous consolidated fiscal year. However, we recognize that circumstances exist that raise substantial doubt about the going-concern assumption, including the recording of ordinary losses for 2 consecutive fiscal years. As of the end of the fiscal year, we were in breach of certain financial covenants on part of our borrowings, but had obtained the lenders’ consent not to exercise their right to declare the loans immediately due and payable.」
Although performance improved, the company explicitly states that circumstances exist that raise substantial doubt about the going-concern assumption because of ordinary losses for 2 consecutive fiscal years and breaches of financial covenants.