FY2027-H1 is the point at which to assess the pace of recovery toward the full-year plan

FY2027-Q1 revenue was ¥5.80407 billion, down 20.7% from ¥7.32232 billion in the same period of the previous year. The operating loss was ¥349.99 million, widening from ¥241.00 million a year earlier. The ordinary loss was ¥240.27 million and the net loss attributable to owners of the parent was ¥191.72 million, both worsening from the previous year's ordinary loss of ¥105.00 million and net loss of ¥82.00 million. The company attributed the results mainly to delays in construction progress, as work at the start of the period focused on preparations before full-scale construction began.

The full-year forecasts for the fiscal year ending March 2027 remain ¥38.0 billion in revenue, ¥1.1 billion in operating profit, ¥1.3 billion in ordinary profit and ¥900 million in net profit, unchanged from the figures announced on 11 May as of Q1. Simply subtracting Q1 results from the full-year forecasts gives ¥32.196 billion in revenue, ¥1.450 billion in operating profit and ¥1.092 billion in net profit to be secured over the remaining period. However, the company has seasonal characteristics, with construction completion and handovers concentrated in Q4, so this does not mean that the difference must be achieved in H1 alone. Rather than using a simple equal allocation by half-year as the benchmark, it is necessary to track how the order backlog is converted into completed construction revenue in the second half.

The key issue in FY2027-H1 is to determine whether the Q1 operating loss resulted from a temporary delay in ramping up construction or whether recovery in the order intake and construction structure is taking time. As of Q1, the company had not disclosed a specific quarterly allocation of the full-year forecast, H1 numerical targets or the level of completed construction revenue required to restore operating profit. Accordingly, the H1 earnings release will provide verification points through revenue, operating profit, ordinary profit and net profit, as well as the progress rate against the full-year forecast and an explanation of the completed construction revenue and order backlog required in the second half.

The company also did not prepare a quarterly cash flow statement for Q1 and did not disclose cash flow from operating activities. In H1, it will be necessary to check not only the recovery in earnings but also operating cash flow and changes in accounts receivable for completed construction and costs on uncompleted construction contracts, to determine whether revenue recognition is running ahead on its own. If losses continue in Q2 while the full-year forecast is maintained, the level of profit required in the second half will rise further, making a more specific explanation of the rationale for leaving the forecast unchanged important.