Development Projects Becoming Unprofitable and Delivery Delays
First written in FY2016. 20 of 33 entries say "Materialised", first in FY2016. Latest entry: 2026-08-13.
BUSINESS BRAIN SHOWA・OTA INC. moved to the "Worse" side of this theme in 2026, 4 years after the typical company in this theme (2022).
The whole theme swung hardest in 2024: 17 of 54 companies on the "Worse" side.
15 other companies' latest entry also says "Materialised".
- FY2026ReframedAnnual report
「In the BPO & managed services business, the volume of outsourced work is estimated and the outsourcing price is determined at the beginning of a contract. If the estimate lacks accuracy or the expected operational improvements fail, the company may enter into a long-term unprofitable contract with the customer,」
The company explicitly identifies the risks of systems development becoming unprofitable and delivery delays, as well as long-term unprofitable BPO contracts resulting from errors in estimating work volumes or failures to improve operations. - FY2025MitigatedAnnual report
「In addition to the response to the underperforming projects that arose in the previous fiscal year having come to an end and the business moving toward recovery, revenue increased significantly overall, including ¥314 million in additional revenue from the full-year contribution of Fresco Co., Ltd., acquired in the previous fiscal year.」
The company explains that its response to the underperforming projects from the previous fiscal year has come to an end and that the PLM support solutions business is moving toward recovery. The impact of profitability and quality risks in development projects has declined from the previous fiscal year. - FY2024MaterialisedAnnual report
「Because underperforming projects arose in the accounting systems consulting and systems development businesses and the PLM support solutions business.」
Underperforming projects actually arose in accounting systems consulting and PLM support solutions, affecting segment profit. - FY2024-Q2MitigatedAnnual report
「Business profit increased significantly, by 20.6% year on year, as accounting systems consulting and systems development benefited from a rebound from last year’s quality problems, while systems development for the financial industry steadily increased profit.」
Business profit in the consulting and systems development business increased, partly due to a rebound from the quality problems that occurred in the previous year, and the impact of quality problems on profitability has eased from the previous year’s corresponding period. - FY2024-Q1MitigatedAnnual report
「Segment profit increased substantially because profit from accounting system consulting and system development rose on a rebound from the previous year's quality issues, while information security consulting recorded a gain from the loss of control of a subsidiary.」
Segment profit in accounting systems consulting and systems development increased due to a rebound from the quality problems that occurred in the previous year. Although the impact of unprofitable projects and quality problems is described as having eased from the previous year’s corresponding period, it is not described as having been fully resolved. - FY2023-Q2MitigatedAnnual report
「Gross profit margin also improved from the same quarter of the previous year after absorbing the impact of the quality problems that arose in the first quarter.」
The impact of the quality problems that arose in the first quarter was absorbed during the cumulative second quarter, and gross profit margin improved year on year, the company explains. The impact of the quality problems on earnings has eased from the previous quarter. - FY2023-Q1MaterialisedAnnual report
「Quality problems arose in some projects in the accounting systems consulting and systems development businesses. After the necessary accounting adjustment of ¥148 million, the segment as a whole remained at approximately the same level as the previous year’s corresponding period.」
A quality problem actually arose in a systems development project and affected segment profit through an accounting adjustment of ¥148 million. - FY2022MaterialisedAnnual report
「Orders in the human resources and payroll outsourcing services business remained firm and exceeded the previous consolidated fiscal year. Revenue and profit, however, fell below the previous consolidated fiscal year due to the occurrence of some unprofitable projects.」
An unprofitable project arose in human resources and payroll outsourcing, resulting in revenue and profit falling below the previous fiscal year. - FY2022-Q3MaterialisedAnnual report
「Meanwhile, profit fell below the same quarter of the previous year due to higher personnel and other expenses to strengthen the operating structure, as well as increased costs resulting from the occurrence of underperforming projects.」
An underperforming project arose in human resources and payroll outsourcing, and its impact on profit falling below the previous year’s corresponding period is now evident through higher costs. - FY2022-Q2MaterialisedAnnual report
「Profit fell below the same quarter of the previous year due to higher personnel and other expenses to strengthen the operating structure, as well as increased costs resulting from the occurrence of underperforming projects.」
An underperforming project arose in human resources and payroll outsourcing, and its impact on profit falling below the previous year’s corresponding period is now evident through higher costs. - FY2021-Q3MitigatedAnnual report
「The company returned to profitability in the consolidated third quarter accounting period, as no new losses have arisen following recognition of the provision and the benefits of improving the business structure of the consolidated subsidiary acquired two years ago are gradually emerging.」
The company explains that no new losses have arisen since a provision was recognized in the previous quarter for projects where operational improvements had been delayed, and that it returned to profitability in the third quarter accounting period. - FY2021-Q2MaterialisedAnnual report
「The company recognized ¥66 million in expected future losses on projects where operational improvements had been delayed.」
The company recognized ¥66 million in expected future losses on projects where operational improvements had been delayed, and the impact of deteriorating project profitability has begun to appear in earnings. - FY2021-Q1MaterialisedAnnual report
「Orders fell below the same quarter of the previous year as projects were scaled back in response to the spread of COVID-19. Revenue and profit also fell below the same quarter of the previous year due to the suspension or downsizing of some projects.」
In systems development for the financial industry, projects were actually scaled back and suspended in response to the spread of COVID-19, resulting in orders, revenue and profit falling below the previous year’s corresponding period. - FY2020-Q3MaterialisedAnnual report
「Profit fell below the same period of the previous year due to an increase in outsourcing expenses and the occurrence of some projects whose profitability deteriorated.」
Some projects in systems development for the financial industry experienced deteriorating profitability, contributing, together with higher outsourcing expenses, to profit falling below the previous year’s corresponding period. - FY2020-Q2MaterialisedAnnual report
「Profit fell below the same period of the previous year due to an increase in outsourcing expenses and the occurrence of some projects whose profitability deteriorated.」
Some projects in systems development for the financial industry experienced deteriorating profitability, contributing, together with higher outsourcing expenses, to profit falling below the previous year’s corresponding period. - FY2019MitigatedAnnual report
「The quality review system established by the Quality Assurance Division has become firmly established, and no new major quality problems have arisen. However, we believe that further strengthening quality remains an issue.」
The company explains that the establishment of its quality review system has prevented new major quality problems from arising, indicating a reduction in the impact of unprofitable projects and quality risks. - FY2019-Q3MitigatedAnnual report
「Meanwhile, revenue remained at approximately the same level as in the same quarter of the previous year, partly due to the impact of an unprofitable project incurred in the previous fiscal year. Profit exceeded the same quarter of the previous year, owing to improved selling prices and higher productivity.」
While the impact of the unprofitable project incurred in the previous fiscal year remains in revenue, profit exceeded the previous year’s corresponding period due to improved selling prices and higher productivity, and the impact of the risk on profitability continues to ease. - FY2019-Q2MitigatedAnnual report
「Meanwhile, revenue remained at approximately the same level as in the same quarter of the previous year, partly due to the impact of an unprofitable project incurred in the previous fiscal year. Profit exceeded the same quarter of the previous year, owing to improved selling prices and higher productivity.」
The impact of the unprofitable project incurred in the previous fiscal year remains in revenue, but profit exceeded the previous year’s corresponding period due to improved selling prices and higher productivity. Although the impact of the risk continues, it has eased in terms of profitability. - FY2019-Q1MitigatedAnnual report
「In systems development focused on accounting, the company won projects, primarily from major customers, in terms of both orders and revenue. Orders exceeded those in the same quarter of the previous year. However, revenue and profit fell below the same quarter of the previous year, partly due to the impact of unprofitable projects that arose during the previous fiscal year.」
Although the impact of unprofitable projects that arose in the previous fiscal year continues to affect revenue and profit, the systems development business as a whole secured segment profit, and the impact has eased from when the losses were recognized in the past. - FY2018MaterialisedAnnual report
「Provision for contract losses included in cost of sales ¥403,918 thousand」
The company recognized ¥403,918 thousand in provision for contract losses, and the impact of projects expected to generate future losses is reflected in full-year earnings. - FY2018-Q3MitigatedAnnual report
「Profit also substantially exceeded the previous year’s level as productivity improved following quality improvement initiatives for loss-making projects that had arisen in recent years.」
Productivity improved through quality improvements targeting unprofitable projects that had arisen in recent years, and earnings significantly exceeded the same period of the previous year. The earnings impact of unprofitable projects has diminished. - FY2018-Q2MitigatedAnnual report
「Profit also substantially exceeded the previous year’s level as productivity improved following quality improvement initiatives for loss-making projects that had arisen in recent years.」
Productivity improved through quality improvements targeting unprofitable projects that had arisen in recent years, and profit from the systems development business significantly exceeded the same period of the previous year. The earnings impact of unprofitable projects has diminished. - FY2018-Q1MitigatedAnnual report
「Profit also substantially exceeded the previous year’s level as productivity improved following quality improvement initiatives for loss-making projects that had arisen in recent years.」
The company explained that productivity improved through quality improvements targeting unprofitable projects that had arisen in recent years, and that profit from the systems development business significantly exceeded the same period of the previous year. Although the impact of the risk has diminished, the occurrence of such projects in the past is still disclosed. - FY2017MaterialisedAnnual report
「Losses were recognized because the factors described above resulted in upfront costs and lower utilization, and some projects also performed poorly.」
Some projects also performed poorly during the current fiscal year, resulting in recognized losses together with lower utilization and upfront costs. - FY2017-Q3MaterialisedAnnual report
「Demand remained high in the information security field, as many companies operate in an environment where they recognize the various risks of targeted cyberattacks, and orders exceeded those in the same quarter of the previous year. Revenue was also maintained at approximately the same level as in the same quarter of the previous year. However, losses were recognized because upfront costs, primarily personnel expenses, were incurred as a result of increasing staff to expand the business and hiring in advance to launch new services, and because some unprofitable projects arose.」
Some unprofitable projects arose in the security field, resulting in recognized losses. - FY2017-Q2MaterialisedAnnual report
「Losses were recognized because the factors described above resulted in upfront costs and lower utilization, and some projects also performed poorly.」
Some projects performed poorly during the current quarter, resulting in recognized losses. - FY2017-Q1MaterialisedAnnual report
「Losses were recognized because the impact of some unprofitable projects that arose during the previous fiscal year continued through part of the current fiscal year, and additional unprofitable projects arose.」
The impact of projects that arose in the previous fiscal year continued, while some unprofitable projects also arose during the current quarter, resulting in recognized losses. - FY2016MaterialisedAnnual report
「This resulted from project delays and other issues caused by unprofitable projects arising in some engagements」
The company stated that unprofitable projects actually arose during the current fiscal year, leading to project delays and lower profit margins.