Q1 recovered, but the FY2027 plan remains weighted toward the second half for earnings

FY2027 Q1 revenue was ¥14,018 million, up 15.2% year on year, while operating profit was ¥425 million. As the company recorded an operating loss of ¥50 million a year earlier, operating profit improved by ¥475 million. Ordinary profit was also ¥646 million, and net profit attributable to owners of the parent was ¥406 million, indicating that the start of the fiscal year was clearly better than the previous year, at least. The company attributed the improvement to its substantial carried-forward order backlog, the execution and completion of orders on hand, higher orders received, price negotiations, productivity improvements and cost control.

However, Q1 progress against the FY2027 full-year forecasts was 18.6% for revenue, calculated as ¥14,018 million ÷ ¥75,300 million, and 5.8% for operating profit, calculated as ¥425 million ÷ ¥7,350 million. Compared with the 25% elapsed portion of the fiscal year, revenue was 6.4 percentage points behind and operating profit was 19.2 percentage points behind. As construction projects may be concentrated in the second half, these gaps alone do not indicate that the plan will be missed, but the extent to which profit progress recovers in H1 will be important.

In the comparative FY2026 H1, revenue was ¥28,629 million and operating profit was ¥1,475 million, for an operating margin of approximately 5.2%. For FY2026 as a whole, revenue reached ¥74,044 million and operating profit ¥7,113 million, with an operating margin of 9.6%. This implies that H2 alone generated revenue of ¥45,415 million and operating profit of ¥5,638 million. Accordingly, in the upcoming H1, we will use the prior-year H1 revenue of ¥28.629 billion and operating profit of ¥1.475 billion as simple minimum benchmarks and assess whether the earnings structure remains weighted toward the second half.

At the next earnings release, it will be necessary to assess not only whether H1 revenue has increased year on year, but also whether the operating margin exceeds approximately 5.2% in the prior-year H1 and how far the progress rate against the full-year operating profit forecast of ¥7.35 billion has advanced. Even if the company leaves its full-year forecast unchanged, we will assess how much the operating profit still required for the remaining period has declined from ¥6,925 million, and whether the assumptions include the timing of project completions and improved profitability.