Can the first-quarter return to profitability lead to profit for the first half?

In the first quarter of the fiscal year ending March 2027, revenue was ¥14,522 million and operating profit was ¥234 million, turning profitable from an operating loss of ¥806 million in the same period of the previous year. Ordinary income was a loss of ¥379 million, while net income attributable to owners of the parent was a loss of ¥306 million, so the operating profit did not flow through to the lower lines in full. The full-year forecast is revenue of ¥127,800 million and operating profit of ¥13,900 million, representing progress of approximately 11.4% and 1.7%, respectively, as of the first quarter.

In the first half of the fiscal year ended March 2026, revenue was ¥34,600 million, operating profit was ¥329 million, ordinary loss was ¥637 million, and interim net loss attributable to owners of the parent was ¥855 million. Accordingly, for FY2027-H1, it is necessary to compare the same period not only to determine whether the first-quarter operating profit was maintained, but also to assess whether cumulative first-half revenue exceeded ¥34,600 million, whether operating profit exceeded ¥329 million, and how much the loss including non-operating income and expenses narrowed.

The company explains that quarterly revenue in its real estate development and real estate investment businesses is affected by the timing of customer deliveries and property sales. In the first quarter, the real estate development business delivered 75 condominium units and 19 senior housing units, for a total of 94 units. In the first-half results, the focus will be on how much this volume added to revenue of ¥14,522 million. Reviewing deliveries, operating profit and ordinary income over the same cumulative period, rather than revenue alone, is important for distinguishing apparent progress due to seasonality from actual improvement in profitability.

The first-quarter supplementary materials show the full-year forecast of ¥127,800 million in revenue and ¥13,900 million in operating profit, but do not indicate the revenue or profit levels required during the remaining period at the end of the first half, or the company’s own assessment of progress toward its plan. For FY2027-H1, disclosure of delivery volumes for condominiums and senior housing, sales results in the investment business, and the breakdown of non-operating income and expenses, in addition to the first-half progress rates against the full-year forecast, will provide information for assessing the reliability of the full-year forecast.