Doraku Holdings Co., Ltd. (TSE:5573) revised its earnings forecast for the fiscal year ending March 2026, citing delays and cost overruns in software development projects.
| Item | Before | After | Change |
|---|---|---|---|
| Revenue | JPY 3,900M | JPY 3,649M | -JPY 250M / -6.4% |
| Operating Profit | JPY 147M | JPY 62M | -JPY 84M / -57.7% |
| Ordinary Income | JPY 156M | JPY 71M | -JPY 84M / -54.0% |
| Net Profit | JPY 115M | JPY 53M | -JPY 62M / -53.9% |
| EPS | JPY 210.30/share | JPY 97.04/share | -JPY 113.26/share |
The company attributed the downward revision to delays and cost overruns in software development projects, primarily due to misestimating development hours and customer coordination issues. These factors led to delayed project deliveries, increased costs that could not be offset by other projects, and a slowdown in subsequent project acquisitions. Management noted that adjustments are being made to strengthen internal processes, including restructuring the sales team and enhancing quality assurance to prevent similar issues in the future.
The earnings forecast revision highlights the impact of project delays and cost overruns on Doraku’s profitability. Investors should monitor future performance and the effectiveness of the company’s corrective measures, as these will influence its long-term outlook.