FY2027-H1: focus on both progress toward the full-year forecast and exceeding the prior-year period

Revenue in FY2027 Q1 was ¥30,243 million, operating profit was ¥1,624 million and ordinary profit was ¥1,492 million. The full-year forecasts are ¥150,000 million in revenue, ¥8,000 million in operating profit and ¥7,000 million in ordinary profit, implying simple progress rates of 20.2%, 20.3% and 21.3%, respectively. Revenue increased 1.1% year on year and operating profit rose 5.1%, putting profit progress broadly in line with revenue progress.

Both revenue and operating profit were below the 25% progress benchmark based on simply treating each quarter as one-fourth of the year. In the construction business, quarterly revenue recognition varies with the timing and progress of projects, so Q1 progress in the low 20% range alone provides little basis for judging whether the full-year forecast will be missed. However, FY2026-H1 revenue was ¥64,196 million and operating profit was ¥3,034 million, making the first test for the next H1 whether these comparable results can be exceeded.

FY2026 full-year revenue was ¥139,255 million and operating profit was ¥6,910 million, so the FY2027 forecasts assume increases of 7.7% in revenue and 15.8% in operating profit. As of Q1, there had been no revision to the full-year forecasts and the plan for higher operating profit remained unchanged, but the reviewed Q1 disclosures did not provide specific H1 targets or quarterly or half-year allocations of the full-year forecasts.

In the next earnings release, the company needs to disclose H1 cumulative revenue, operating profit and operating margin, as well as progress rates against the full-year forecasts. If H1 revenue falls below ¥64,196 million, the company will need to explain whether this reflects only a timing shift in revenue recognition or delays in order intake and project starts. For operating profit, we will assess not only whether ¥3,034 million is exceeded but also whether the operating margin has improved from approximately 4.7% in the prior-year H1.