Q1: lower revenue but higher earnings; FY2027-H1 will test the sustainability of the full-year recovery plan

FY2027-Q1 consolidated revenue was ¥2,526 million, down 3.3% from ¥2,613 million in the same period of the previous year. Operating profit rose 2.5% to ¥248 million from ¥242 million, ordinary profit increased 1.1% to ¥215 million, and net income attributable to owners of the parent rose 6.0% to ¥142 million. Although revenue contracted, the company secured profits through measures including pricing and cost management. It will therefore be necessary to determine how much of the result reflected profitability management rather than a simple recovery in demand.

The company’s FY2027 full-year forecasts are revenue of ¥11,659 million, operating profit of ¥1,080 million, ordinary profit of ¥989 million, and net income attributable to owners of the parent of ¥637 million. Compared with FY2026 results, revenue is expected to increase 0.3%, operating profit 6.9%, ordinary profit 7.8%, and net income 26.2%. The annual dividend forecast is ¥35, unchanged from the FY2026 result. No revisions to the earnings forecasts had been made as of Q1, and the company continues to operate on the basis of its full-year plan.

As a percentage of the full-year forecasts, FY2027-Q1 progress was approximately 21.7% for revenue, 23.0% for operating profit, 21.7% for ordinary profit, and 22.3% for net income. Revenue and ordinary profit were below the simple 25% quarterly time-based benchmark, while operating profit and net income were relatively close to it. However, the company’s real estate sales and asset utilization businesses are subject to significant fluctuations depending on the timing of deliveries, so full-year performance cannot be assessed based solely on Q1 progress. The priority will be to determine whether first-half revenue of ¥5,073 million, operating profit of ¥423 million, ordinary profit of ¥380 million, and net income of ¥238 million can be exceeded.

Compared with FY2026-Q1, revenue declined from ¥2,613 million to ¥2,526 million, while operating profit rose from ¥242 million to ¥248 million and the operating margin increased from approximately 9.3% to approximately 9.9%. This suggests that measures such as pricing adjustments to absorb higher construction material and construction costs, construction cost management, and higher rental income may have had a certain effect. However, the profit impact of individual factors has not been disclosed.

In FY2027-H1, the next period under review, the company’s ability to recover revenue to the previous year’s level and exceed the previous year’s operating profit will be assessed, along with progress toward the full-year operating profit forecast of ¥1,080 million. In particular, it will be necessary to determine, together with segment-level profit, whether the factors that allowed the company to maintain its Q1 margin reflected a temporary sales mix or a repeatable improvement driven by pricing and cost management.