Q1 operating profit is ahead of the full-year plan; sustainability through the first half is the focus

Revenue in Q1 of the fiscal year ending March 2027 was ¥33,491 million, up 38.8% year on year, while operating profit was ¥1,293 million, up 285.1%. Ordinary profit was ¥1,450 million and quarterly net income attributable to owners of the parent was ¥865 million, with each level of the income statement remaining profitable. Operating profit grew faster than revenue, confirming an improvement in profitability on a standalone Q1 basis.

The full-year forecasts are revenue of ¥150,000 million, operating profit of ¥3,900 million, ordinary profit of ¥4,200 million and net income of ¥2,900 million. Q1 progress against these forecasts was 22.3% for revenue, 33.2% for operating profit, 34.5% for ordinary profit and 29.8% for net income. Revenue was below the simple quarterly allocation of 25.0%, while operating profit was 8.2 percentage points above 25.0%, indicating that profit is progressing ahead of revenue.

However, the company forecasts operating profit of ¥3,900 million for the fiscal year ending March 2027, down 27.5% from ¥5,375 million in the previous fiscal year. The Q1 operating margin was approximately 3.9%, compared with approximately 2.6% for the full-year forecast, so the plan does not assume that Q1 profitability will continue unchanged throughout the year. No revision to the earnings forecasts had been indicated as of Q1, making it important to determine whether the assumptions underlying the plan change in H1.

On a simple half-year allocation, H1 benchmarks would be revenue of ¥75,000 million and operating profit of ¥1,950 million. However, quarterly profit recognition can fluctuate depending on construction progress and project profitability, so these figures should be treated as benchmarks for monitoring progress rather than the company’s H1 forecasts. In the H1 results, we will examine not only revenue but also the operating margin, whether the full-year forecasts are maintained or revised, and whether the factors driving profit ahead of revenue are temporary or ongoing.