Revenue increased but profit was flat, making the ability of loss-making segments to be absorbed the focus for FY2027 H1

Consolidated revenue in FY2027 Q1 was ¥217,681 million, up 1.1% year on year. Operating income was ¥11,197 million, down 0.9%, ordinary income was ¥12,517 million, down 3.2%, and net income attributable to owners of the parent was ¥9,349 million, down 19.5%. Progress against the full-year revenue forecast of ¥870,000 million was 25.0%, while progress against the operating income forecast of ¥46,000 million was 24.3%, superficially indicating a level broadly in line with the full-year plan for a first quarter. However, the fact that sales growth has not translated into profit growth will be a key point to assess at the next results announcement.

By segment, Flour Milling posted revenue of ¥112,008 million and operating income of ¥7,128 million, up 7.0% and 6.8% year on year, respectively. Foods posted revenue of ¥54,688 million, down 0.1%, but operating income increased 23.5% to ¥2,285 million. By contrast, Prepared Foods posted revenue of ¥39,388 million and operating income of ¥956 million, down 3.4% and 32.7%, respectively, while Other posted revenue of ¥11,595 million and operating income of ¥955 million, down 23.7% and 34.1%.

In Prepared Foods, recovery in customer traffic, price revisions, and productivity improvements had previously contributed to higher profit, but in the latest quarter lower sales and cost-related factors simultaneously pushed down profit. In Other, the reversal of the effect of a large construction project in the prior year was also a factor behind the declines in revenue and profit. At the next results announcement, we will assess whether operating income in Prepared Foods has recovered to the 80%-plus range year on year, whether the decline in Other has narrowed to less than ¥1,000 million on an operating income basis, and whether higher profit in Flour Milling and Foods can continue to absorb declines in the loss-making segments.