Q1 operating profit is trailing revenue, making it necessary to assess profitability in the first half

Revenue in Q1 of the fiscal year ending March 2027 rose 4.5% year on year to ¥14,026 million, while operating profit fell 3.1% to ¥523 million. Ordinary profit rose 1.5% to ¥601 million, but net profit attributable to owners of the parent fell 1.0% to ¥347 million, indicating that the increase in the top line has not been fully reflected in profit below the operating level.

Progress against the full-year forecasts was 21.6% for revenue, calculated as ¥14,026 million ÷ ¥65,000 million, and 16.3% for operating profit, calculated as ¥523 million ÷ ¥3,200 million. With 25.0% of the fiscal year elapsed at the end of Q1, revenue was approximately 3.4 percentage points below a simple even pace, while operating profit was approximately 8.7 points below. Construction work progresses seasonally by quarter, so the figures alone do not establish that the company will fall short, but how much of the gap is narrowed in the first half will be important.

The company's forecasts for the fiscal year ending March 2027 are revenue of ¥65,000 million, operating profit of ¥3,200 million, ordinary profit of ¥3,250 million and net profit of ¥2,150 million. Revenue is expected to rise 2.7% from the previous year's results, while operating profit is expected to fall 14.0%, ordinary profit 14.8% and net profit 10.7%, indicating divergent trends for revenue and profit. Full-year operating margin, calculated by dividing the operating profit forecast by the revenue forecast, is approximately 4.9%, down from 5.9% in the fiscal year ended March 2026.

The factors behind Q1 revenue growth included progress on large construction projects already under way, higher sales volumes in the building-materials manufacturing and sales business, and design and supervision services in the Other business. On the profit side, the company cited higher raw-material and fuel costs in the building-materials manufacturing and sales business and lower intake at industrial-waste treatment facilities in the Other business, but did not disclose profit changes by factor or amounts by cost item. For the first half, the simple even-period benchmarks of ¥32,500 million in revenue and ¥1,600 million in operating profit should be used as a reference while assessing construction progress and the impact of rising costs.