FY2027 1Q: profits are ahead of plan, with 1H providing a test of full-year plan achievability

Revenue for the first quarter of FY2027 was ¥5,614 million, operating income was ¥491 million, ordinary income was ¥521 million, and net income attributable to owners of the parent was ¥383 million. Year on year, revenue rose 15.3%, operating income 75.8%, ordinary income 86.8% and net income 105.1%, with profit growth substantially exceeding revenue growth.

The full-year forecast remains unchanged at ¥24,000 million in revenue, ¥1,770 million in operating income, ¥1,780 million in ordinary income and ¥1,250 million in net income attributable to owners of the parent. On a simple calculation, first-quarter progress was 23.4% for revenue, 27.7% for operating income, 29.3% for ordinary income and 30.6% for net income. Although profit is ahead of revenue in the first quarter, this comparison assumes linear progress against the full-year plan, and attention is required because construction-related demand tends to make results weighted toward the second half.

In the most recent comparable first-half results, FY2025-H1 revenue was ¥10,078 million and operating income was ¥742 million, while FY2026-H1 revenue was ¥10,274 million and operating income was ¥746 million. First-half revenue rose only 1.9% and operating income 0.5%, making it important to determine whether the sharp profit growth seen in the first quarter is maintained through the first half as a whole. In some past years, 54.7% of full-year revenue and 57.1% of operating income were recorded in the second half, so it is too early to judge full-year achievement based solely on first-half progress.

For FY2027-H1, the simple benchmark will be at least ¥12,000 million in revenue, ¥885 million in operating income, ¥890 million in ordinary income and ¥625 million in net income, representing 50% of the full-year plan. This is not our estimate adjusted for the company forecast or seasonality, but a simple half-year conversion benchmark. In addition, we will assess whether the unchanged full-year forecast remains in place, whether the company provides an explanation based on second-half weighting, and whether the earnings level underlying the ¥46 full-year dividend remains unchanged.