Progress toward the first-half plan is led by profit growth, with the focus on confirmation in 2Q

In the first quarter of the fiscal year ending March 2027, net sales were ¥5,146 million, operating profit was ¥250 million, ordinary profit was ¥298 million, and quarterly net income attributable to owners of the parent was ¥206 million. Compared with the same period of the previous year, net sales increased 7.1% and operating profit increased 15.7%, with operating profit growing faster than net sales. The full-year forecasts are ¥20,100 million in net sales and ¥950 million in operating profit, and the initial forecasts remained unchanged as of 1Q.

The company disclosed progress against its first-half forecasts at 53.1% for net sales, 62.5% for operating profit, 74.7% for ordinary profit, and 76.7% for net income. In addition, deducting the second-half forecasts stated in the materials, namely ¥10,400 million in net sales and ¥550 million in operating profit, from the full-year forecasts produces a first-half equivalent plan of ¥9,700 million in net sales and ¥400 million in operating profit. The shortfall from 1Q results is approximately ¥4,554 million in net sales and approximately ¥150 million in operating profit, making 2Q results a direct test of whether the first-half plan will be achieved.

Operating profit in 1Q alone reached approximately 26.3% of the full-year forecast of ¥950 million, while it reached 62.5% of the first-half plan of ¥400 million. Profit is therefore progressing ahead of net sales, but the company’s materials do not state whether 1Q results were above or below plan. Accordingly, the key points to confirm are whether the effects of price revisions and the increase in sales volumes continue in 2Q, and whether the company will maintain its full-year forecasts after achieving the first-half plan.

If the first half ends with net sales of ¥9,700 million and operating profit of ¥400 million, the second half will require net sales of ¥10,400 million and operating profit of ¥550 million. The ¥550 million of operating profit required in the second half exceeds the first-half plan of ¥400 million, so the 2Q results will be important not only for determining whether the first-half plan was achieved, but also for assessing the feasibility of the second-half plan. In particular, we will track whether the company provides specific details on any revision to the full-year forecasts, second-half sales volumes, price pass-through, and its assumptions for raw material and fuel costs.