The first-half forecast was revised sharply upward, but the full-year forecast was left unchanged, leaving the company dependent on the second half.

On 29 October, the earnings forecast was revised to net sales of ¥25.3 billion, operating profit of ¥630 million, ordinary profit of ¥490 million and interim net profit attributable to owners of the parent of ¥290 million for FY2027-H1. The interim dividend forecast was left unchanged at ¥25. Ordinary profit was raised 4.9-fold, from the previous forecast of ¥100 million to ¥490 million. The first point to confirm at the next earnings release will be whether these figures were achieved as actual results rather than merely forecast values.

As of Q1, the full-year forecasts were net sales of ¥55.7 billion, operating profit of ¥1.5 billion, ordinary profit of ¥900 million, net profit of ¥600 million and an annual dividend of ¥50. A simple comparison of the revised first-half forecasts with these full-year forecasts gives progress rates of 45.4% for net sales, 42.0% for operating profit, 54.4% for ordinary profit and 48.3% for net profit. The net sales and operating profit figures are estimates based on the assumption that the full-year plan as of Q1 remains unchanged. It will therefore be necessary at the next earnings release to determine separately whether the full-year forecasts for net sales, operating profit and net profit have also been revised.

On the same basis, the second half would need to generate net sales of ¥30.4 billion, operating profit of ¥870 million, ordinary profit of ¥410 million and net profit of ¥310 million. It is important to determine whether the first-half upside in ordinary profit can be reproduced through improved profitability in textiles and functional materials, rather than resulting from one-off foreign-exchange gains, insurance proceeds or gains on sales. Q1 included no extraordinary gains or losses, and reported operating profit of ¥408 million, ordinary profit of ¥329 million and net profit of ¥186 million. The first-half results should therefore also be reviewed for the breakdown of non-operating and extraordinary income and expenses.

The annual dividend forecast also remains unchanged at ¥50. As of Q1, no quantified shareholder-return policy, such as a payout ratio or DOE, had been disclosed, so it is not yet possible to determine whether the first-half profit upside will be reflected in the dividend policy. At the next earnings release, the first-half results, any revision to the full-year forecasts, the second-half profit assumptions and the maintenance of the ¥50 annual dividend should be reviewed together.