Raised first-half business profit guidance following the first-quarter beat, but full-year guidance to be reassessed at 2Q

In the first quarter of the fiscal year ending March 2027, revenue was ¥679.0 billion, up 14.0% year on year, and business profit exceeded the prior-year level at ¥48.4 billion. The business profit margin was 7.1%, an improvement of 2.3 percentage points year on year. IFRS operating profit in the financial statements was ¥47.33 billion, and its definition differs from the ¥48.4 billion business profit presented in the company’s briefing materials. Business profit, rather than operating profit, therefore needs to be used when comparing results with first-half guidance.

Based on first-quarter performance, first-half business profit guidance was raised by ¥14.0 billion, or 19.2%, from the initial ¥73.0 billion to ¥87.0 billion. Dividing first-quarter business profit of ¥48.4 billion by first-half guidance of ¥87.0 billion gives progress of 55.6%, but this is a mechanical calculation that does not account for seasonality. Accordingly, at the next results announcement, it will be necessary to confirm not only whether first-half guidance was exceeded, but also whether second-quarter business profit alone reached at least ¥38.6 billion.

At the end of the fiscal year ended March 2026, the company had provided guidance for fiscal 2027 revenue of ¥2.83 trillion, business profit of ¥160.0 billion and net income attributable to owners of the parent of ¥90.0 billion. However, the first-quarter results materials did not restate the full-year outlook numerically and said it would be reviewed as appropriate at the second-quarter results announcement. This does not necessarily mean that the full-year plan has been withdrawn, but raising only the first-half outlook leaves full-year profit allocation and second-half assumptions unsettled.

At the next results announcement, in addition to the achievement level of first-half business profit guidance of ¥87.0 billion, it will be necessary to confirm whether full-year business profit guidance of ¥160.0 billion is maintained or raised to reflect a recovery in volumes and strategic pricing. It will also be important to see whether the company provides updated guidance at the same time for full-year revenue of ¥2.83 trillion, net income attributable to the parent of ¥90.0 billion and the annual dividend of ¥26. As full-year operating profit guidance has not been disclosed previously, a key issue will be whether the company clearly distinguishes business profit from operating profit.