Can the sharp increase in first-quarter profit be sustained through the first half?

For FY2026, revenue was ¥399,898 million and operating profit was ¥17,530 million, down 2.3% and 8.0%, respectively, from the previous fiscal year. In FY2027-Q1, revenue was ¥121,318 million, operating profit was ¥12,142 million, profit before tax was ¥14,158 million and profit attributable to owners of the parent was ¥10,378 million. The recovery in profit has therefore significantly outpaced revenue growth.

The FY2027 full-year forecasts are revenue of ¥455,000 million, operating profit of ¥21,000 million, profit before tax of ¥27,500 million and net profit of ¥20,500 million. At the end of Q1, progress was 26.7% for revenue versus 57.8% for operating profit, significantly ahead of a simple even quarterly run rate. Accordingly, for the first half, ¥227,500 million of revenue and ¥10,500 million of operating profit serve as the mechanical 50% benchmarks, against which to assess whether the pull-forward in profit will continue.

By segment, Q1 revenue was ¥87,894 million in Materials and ¥33,424 million in Solutions, while segment profit was ¥8,759 million and ¥4,661 million, respectively. The combined segment profit of ¥13,420 million exceeded company-wide operating profit of ¥12,142 million, making the difference between segment profit and consolidated operating profit another point to monitor. In the first half, Materials should be tracked separately for market conditions and inventory effects, and Solutions for volume and profitability improvements.

The Q1 earnings summary did not include details of the factors behind changes in results and instead referred readers to supplementary earnings materials. In the next report, it will be important to see whether the company discloses Q2 profit alone, the difference from the prior-year period, and the monetary contributions of prices, volume, spreads, inventory valuation and SG&A, so that the extent to which Q1 operating profit of ¥12,142 million is reproduced in the first half can be assessed.