In H1 FY2027, operating profit progress is the focus rather than continued revenue growth

Revenue in Q1 FY2027 was ¥56,291 million, operating profit was ¥1,232 million, ordinary profit was ¥1,600 million and net profit attributable to owners of the parent was ¥3,466 million. The full-year plan calls for revenue of ¥221,000 million, operating profit of ¥5,900 million, ordinary profit of ¥6,200 million and net profit of ¥6,900 million, representing progress rates of 25.4%, 20.8%, 25.8% and 50.2%, respectively. Revenue and ordinary profit were close to the 25% level after three months, while operating profit was 4.2 percentage points below it.

Accordingly, whether H1 operating profit can exceed ¥2,950 million, equivalent to 50% of the full-year plan, will be a benchmark for assessing the likelihood of meeting the plan, rather than simply measuring revenue growth. As of Q1, revenue growth of 7.7% was accompanied by operating profit growth of 10.6%, confirming both revenue and profit growth. However, because the full-year plan assumes a 10.4% decline in operating profit, raw-material positions and selling prices will need to continue improving in Q2 for first-half profit progress to exceed the plan.

By segment, feed revenue was ¥49,867 million and segment profit was ¥1,267 million, while other revenue was ¥6,423 million and segment profit was ¥460 million. Both segments recorded year-on-year revenue and profit growth, but consolidated operating profit progress was only 20.8% of the full-year plan. H1 will need to establish how far strong growth in Other can lift company-wide profit and whether the improvement in feed profitability is temporary.

No quarterly consolidated cash flow statement was prepared for Q1, so the cash-flow support for profit cannot yet be confirmed. The operating profit margin was also not disclosed. At the next results announcement, it will be important to determine whether the company discloses cumulative H1 operating profit, gross or operating margin, progress by segment, and ordinary earnings power excluding extraordinary income.