FY2027-H1: Focus on progress toward the full-year plan and the timing of project revenue recognition

FY2027-Q1 revenue was ¥5,578.089 million, up 158.4% year on year. Operating profit was ¥360.060 million, ordinary profit was ¥187.655 million, and profit attributable to owners of the parent was ¥74.800 million. As the year-earlier period recorded an operating loss of ¥79.337 million, an ordinary loss of ¥199.616 million and a quarterly net loss attributable to owners of the parent of ¥189.978 million, the company returned to profitability at every level of the income statement.

The full-year plan calls for revenue of ¥31,395 million, operating profit of ¥2,864 million, ordinary profit of ¥2,013 million and profit attributable to owners of the parent of ¥1,178 million. Q1 progress was approximately 17.8%, 12.6%, 9.3% and 6.3%, respectively, below the benchmark that would apply if half of the full-year figures were earned in the first six months. However, the company has explicitly stated that its business structure causes quarterly results to vary significantly depending on when properties are completed and handed over, so it would not be appropriate to assess the achievability of the full-year plan based solely on Q1 progress.

In the supplementary earnings materials for FY2026, the company assumed 1 industrial site and 1 new condominium project in Q1, and 1 industrial site and 2 new condominium projects in Q4, as planned projects for FY2027. Accordingly, in H1 it will be important to confirm not only whether the Q1 projects were actually handed over and their revenue recognized, but also whether approvals, sales launches and contract progress for the Q4 projects remain on track.

At the next results announcement, it would be useful to show the gap from the mechanical six-month benchmarks of ¥15,697.5 million in revenue and ¥1,432 million in operating profit, rather than merely confirming higher revenue and profit. In particular, progress in ordinary profit and net profit was lower than that in operating profit at the Q1 stage, so we will also look to confirm whether interest expense, the tax burden and non-operating items are hindering the pace required to achieve the full-year plan.