A return to profitability in the first half is the prerequisite for ¥3.6 billion in full-year operating profit

First-quarter revenue was ¥20,193 million, representing progress of 19.9% against the full-year forecast of ¥101,600 million. Compared simply with the 25% share of the fiscal year represented by one quarter, revenue progress was approximately 5.1 percentage points behind. The company posted an operating loss of ¥263 million, so profit progress against the full-year forecast of ¥3,600 million was negative. Although this was an improvement from the ¥740 million operating loss in the same quarter of the previous year, substantial earnings improvement from the second quarter onward is required to meet the full-year plan.

The first-half revenue forecast is ¥45,800 million and the operating profit forecast is ¥800 million. Based on first-quarter results, the second quarter alone needs to generate approximately ¥25,607 million in revenue and ¥1,063 million in operating profit. The plan implies a first-half operating margin of approximately 1.7%, compared with an operating margin of approximately negative 1.3% in the first quarter. Accordingly, the key issue is not merely whether the loss narrows, but whether the company returns to profitability in the second quarter and accumulates profit for the first half as a whole.

The full-year operating profit forecast of ¥3,600 million is approximately 5.9 times the ¥607 million reported for the fiscal year ended March 2026. At the end of the first quarter, ¥3,863 million of profit remained to be generated against the full-year plan. Even if the first-half plan is achieved, a further ¥2,800 million in operating profit will be required in the second half. It is necessary to assess whether the improvement from optimizing the production structure extends beyond a temporary reduction in losses and continues through both the first and second halves.

The disclosures provided do not quantify the assumptions underlying the plan, such as first-half and full-year segment profit plans, coke production and sales volumes, or the amount of maintenance-cost reductions. In the next results release, we will check not only first-half revenue and operating profit, but also how much the coke business contributed to profit improvement, whether volume declines in the fuel and resource recycling business are continuing, and whether the company provides the basis for maintaining its full-year forecasts.