Q1 operating profit is ahead of schedule, while the full-year outlook diverges between core operations and net income

Q1, covering 1 March to 31 May 2026, recorded revenue of ¥3,549 million, operating profit of ¥198.9 million, ordinary profit of ¥170 million and net income attributable to owners of the parent of ¥390 million. Year on year, revenue increased 6.3% and operating profit increased 9.9%, while ordinary profit declined 2.2%. Revenue growth translated into higher profit at the operating level, but profit including non-operating items did not move in the same direction.

Comparing the Q1 figures mechanically with the revised full-year forecast as of July, progress was approximately 23.0% for revenue, 49.1% for operating profit and 61.9% for net income. Operating profit had reached nearly half of the full-year forecast of ¥405 million in Q1 alone, but this does not mean the company has set a 50% H1 operating profit target. Cumulative H1 operating profit exceeding ¥202.5 million should therefore be used as one mechanical checkpoint. For revenue, it should also be confirmed whether H1 can secure ¥7,723 million, equivalent to half of the full-year forecast.

The changes to the full-year forecasts clearly distinguish core operations from one-off factors. Against the April forecasts of ¥15,446 million in revenue, ¥424 million in operating profit and ¥422 million in net income, the forecasts after Q1 were ¥15,446 million, ¥405 million and ¥630 million, respectively. In other words, the revenue forecast was unchanged, the operating profit forecast was reduced by ¥19 million, or approximately 4.5%, while the net income forecast was increased by ¥208 million, or approximately 49.3%. In the H1 results, it will be necessary to determine whether the revision reflects a lower core operating forecast incorporating higher costs or an upward revision to net income incorporating extraordinary gains.

The year-earlier H1 results were revenue of ¥6,437 million, operating profit of ¥96 million, ordinary profit of ¥127 million and net income of ¥120 million. Accordingly, the current H1 results should be assessed not only on whether revenue exceeds the year-earlier level, but also on whether operating profit and ordinary profit separately exceed ¥96 million and ¥127 million. In particular, operating profit increased in Q1 while ordinary profit declined. Key points for review are whether non-operating costs, such as expenses related to the acquisition of the Hilltop Hotel, will continue in Q2 and whether the pace of core operations is sufficient to maintain the revised full-year operating profit forecast of ¥405 million.