Q1 delivered higher revenue and profit, but H1 progress against the FY2027 plan is the focus

Revenue in Q1 of the fiscal year ending March 2027 was ¥19,483 million, up 10.2% year on year, operating profit was ¥2,205 million, up 16.8%, ordinary profit was ¥2,334 million, up 12.8%, and net income attributable to owners of the parent was ¥1,546 million, up 11.3%. Operating profit grew faster than revenue, indicating an improvement in company-wide margins. Revenue and operating profit increased from ¥17,677 million and ¥1,887 million, respectively, in the year-earlier quarter, extending the recent improvement in earnings into Q1.

The full-year forecasts are revenue of ¥112,500 million, operating profit of ¥12,200 million, ordinary profit of ¥12,400 million, and net income attributable to owners of the parent of ¥9,250 million. Q1 progress was 17.3%, 18.1%, 18.8% and 16.7%, respectively, so neither revenue nor profit was ahead of the pace implied by simply dividing the year into four quarters. However, the company is affected by construction progress and project completion timing, so judging performance solely against a simple 25% benchmark is not appropriate. A more practical comparison will be whether H1 results exceed the FY2026 H1 figures of ¥41,441 million in revenue and ¥4,091 million in operating profit.

FY2026 full-year revenue was ¥104,823 million and operating profit was ¥11,682 million, meaning the FY2027 plan assumes increases of ¥7,677 million in revenue and ¥518 million in operating profit. In other words, the current-year plan does not assume a further sharp acceleration in profit growth, but calls for revenue growth while maintaining a high level of profitability. Whether the Q1 operating profit growth rate of 16.8% continues beyond H1, or slows to approximately 4.4% in line with the full-year plan, will be an important focus of the next results announcement.

At the next results announcement, the key checks will be whether revenue recognition in the Facilities Construction Business is weighted toward the second half and whether sufficient projects are being completed from H1 onward to meet the plan, using the previous H1 revenue of ¥41,441 million and operating profit of ¥4,091 million as benchmarks. The company should also clarify whether the FY2027 full-year forecast has been revised, the assumptions for the operating margin, and the order backlog. There was no revision to the earnings forecast as of Q1. If the forecast is left unchanged again next time, H1 results will be an important basis for assessing whether the plan remains realistic.