First-quarter profit growth is ahead of plan; FY2027-H1 will confirm whether this momentum is sustainable

In FY2027 Q1, revenue was ¥135,667 million, operating profit was ¥22,573 million, ordinary profit was ¥25,090 million and net income attributable to owners of the parent was ¥18,230 million. Year on year, revenue increased 7.8%, operating profit 23.4%, ordinary profit 22.0% and net income 19.5%, with profit growth outpacing revenue growth. The full-year forecasts are ¥560,000 million in revenue and ¥82,000 million in operating profit, putting first-quarter progress at approximately 24.2% and 27.5%, respectively.

Profit margins also improved. The first-quarter operating margin was approximately 16.6%, up approximately 2.1 percentage points from approximately 14.5% in the same period last year and above FY2026’s full-year figure of 16.0%. The year-on-year increase in operating profit was ¥4,273 million, compared with a ¥9,864 million increase in revenue, indicating that profit growth is running ahead. However, the strong first quarter does not mean that the forecast for a full-year decline in operating profit has been eliminated. The FY2027 full-year operating profit forecast of ¥82,000 million is ¥3,799 million, or 4.4%, below the FY2026 result of ¥85,799 million.

In the next report, for FY2027-H1, the focus should be on confirming progress in operating profit and the maintenance of margins rather than simply whether revenue growth continues. In particular, it will be important to see whether the operating margin in the 16% range seen in the first quarter can be maintained in the second quarter, when increases in raw material costs, manufacturing expenses and depreciation are expected to become more pronounced. The company also did not prepare a quarterly consolidated cash flow statement for the first quarter, so operating cash flow and investment outlays could not be confirmed. In the first-half results, it will also be necessary to check whether higher profit is translating into cash generation and whether additional disclosure is provided on capital allocation, including capital investment and shareholder returns.