The focus for the first half of FY2027 is confirming the profit recovery supporting the full-year forecast

Revenue for the first quarter of the fiscal year ending March 2027 was ¥4,941.210 million, representing progress of 21.5% against the full-year forecast of ¥23,000 million. This was below the 25% benchmark based on simply treating each quarter as one-fourth of the year, while the company provided no quantitative explanation of seasonality. Operating loss was ¥30.424 million, representing negative progress of 2.6% against the full-year operating profit forecast of ¥1,150 million.

Based solely on first-quarter results and a simple calculation, the company would need revenue of ¥18,058.790 million in the remaining 3 quarters to achieve its full-year revenue forecast. For operating profit, it would need ¥1,180.424 million in the remaining 3 quarters after covering the ¥30.424 million first-quarter loss. The first-half results will be assessed against cumulative revenue of ¥11,500 million and cumulative operating profit of ¥575 million, but these are mechanical benchmarks that do not reflect seasonality and are not the company's formal quarterly plan.

The company attributed the decline in revenue to a decrease in ground improvement work. On profit, it cited the reversal of high-margin projects in the same period of the previous year, low-margin projects undertaken to prioritize utilization, higher labor costs and a one-time increase in SG&A expenses. However, it has not disclosed by how many millions of yen each of construction volume, low-margin projects, labor costs and SG&A expenses reduced operating profit. In the first half, we will assess whether the company provides standalone second-quarter revenue and operating profit, the basis for maintaining the ¥1,150 million full-year forecast, and specific measures to restore margins.