First-quarter profit rose sharply, but progress toward the full-year forecast remains under review

Construction revenue in the first quarter of FY2027 was ¥162,369 million, up 14.8% year on year. Operating profit was ¥13,601 million, up 89.0%, ordinary profit was ¥15,434 million, up 76.6%, and net income attributable to owners of the parent was ¥9,894 million, up 127.6%. Revenue and profit increased simultaneously, marking a strong start in which operating profit growth substantially outpaced revenue growth.

However, the company’s full-year FY2027 forecast is ¥810,000 million in revenue, ¥97,000 million in operating profit, ¥96,000 million in ordinary profit and ¥70,000 million in net income attributable to owners of the parent. First-quarter progress was only 20.0%, 14.0%, 16.1% and 14.1%, respectively. Both revenue and operating profit were below 25%, the level implied by a simple even quarterly allocation, so it is too early to judge whether the full-year forecast will be exceeded based solely on the sharp first-quarter profit increase.

Actual revenue and operating profit in FY2026 were ¥750,742 million and ¥90,256 million, respectively, while the FY2027 forecasts represent increases of 7.9% and 7.5%. Unlike progress toward the full-year forecast in the first quarter of FY2026, the current year shows strong year-on-year growth but low cumulative progress against the full-year plan. Construction activity can fluctuate between periods depending on project progress and the timing of acceptance, but the current information source does not disclose seasonality or quarterly plan figures.

In FY2027-H1, the key point is how actual results progress against the simple six-month reference figures of ¥405,000 million in revenue and ¥48,500 million in operating profit. Operating profit is particularly important, including how much is added in the second quarter from the first-quarter figure of ¥13,601 million. In addition to maintaining the full-year forecast of ¥97,000 million, the focus will be on whether backlog conversion, margin improvement and the impact of 弘電社 following its conversion into a wholly owned subsidiary support achievement of the plan.