FY2027 1Q got off to a reasonably solid start, with profit ahead of sales relative to the full-year plan

In FY2027 1Q, revenue was ¥24,089 million, up 18.9% year on year; operating profit was ¥2,815 million, up 92.5%; ordinary profit was ¥2,928 million, up 90.3%; and net income attributable to owners of the parent was ¥1,959 million, up 86.4%. The operating margin rose to 11.7%, approximately 4.5 percentage points above the approximately 7.2% recorded in the same quarter of the previous year. The company attributes the increase in revenue and profit to steadily progressing its substantial order backlog and thorough schedule and cost management.

The full-year forecasts are revenue of ¥108,000 million, operating profit of ¥9,400 million, ordinary profit of ¥9,900 million and net income attributable to owners of the parent of ¥6,600 million. Progress in 1Q was 22.3%, 29.9%, 29.6% and 29.7%, respectively. Revenue was slightly below the 25% quarterly run-rate, while operating profit was well above it, indicating that profit is currently ahead of revenue. A simple calculation of the amounts still required to meet the full-year forecasts after 1Q gives revenue of ¥83,911 million and operating profit of ¥6,585 million.

In the previous fiscal year, revenue and operating profit in the first half of the fiscal year ended March 2026 were ¥43,603 million and ¥3,635 million, down 12.1% and 20.0%, respectively, year on year. For the full year, revenue remained down at ¥99,448 million, while operating profit increased 9.3% to ¥8,822 million. The sharp recovery in FY2027 1Q may reflect the end of the decline following the previous fiscal year’s large projects, as well as the effects of project progress and cost management. However, the 1Q earnings report does not disclose a breakdown by factor or the profit contribution of individual projects.

At the next interim results announcement, the focus will be on whether revenue progress approaches the 25% benchmark and whether the operating profit progress rate can remain around 30%. In particular, it will be important to confirm whether operating profit for cumulative 2Q exceeds the ¥3,635 million recorded in the previous interim period, whether project profitability in the electrical installation business has deteriorated, and whether the assumptions underlying the full-year operating profit forecast of ¥9,400 million remain unchanged. The net income forecast of ¥6,600 million is also below the previous fiscal year’s actual ¥7,500 million, so progress in core operating profit excluding the reversal of the gain on securities sales recorded in the previous fiscal year should also be examined separately.