The company aims to recover operating profit in the fiscal year ending March 2027, but first-half profit progress and special factors need to be assessed

In the fiscal year ended March 2026, revenue was ¥1,309.281 billion, up 0.9% from the previous fiscal year, while operating profit was ¥106.477 billion, down 1.4%. For the fiscal year ending March 2027, the company forecasts revenue of ¥1,408.4 billion and operating profit of ¥115.0 billion, representing growth of 7.6% and 8.0%, respectively. The operating margin declined to 8.1% in the previous fiscal year, so the plan assumes a recovery to approximately 8.2%.

First-quarter results were revenue of ¥332.970 billion, operating profit of ¥25.479 billion, ordinary profit of ¥28.084 billion and profit attributable to owners of the parent of ¥12.793 billion. Recent reports indicate that revenue increased 9.1% year on year and operating profit 20.1%, while net income fell 2.7%. Revenue and operating profit represented progress of approximately 23.6% and 22.2%, respectively, against the full-year plan, but final profit was only approximately 16.8%, indicating that the improvement at the operating level did not flow through fully to net income.

The company said that the recognition of extraordinary losses affected first-quarter net income, but the information provided does not specify their amount or breakdown by asset. Accordingly, in FY2027-H1 it will be necessary to assess whether one-off items such as impairment losses and losses related to fixed assets were limited to the first quarter or will continue into the first half. Ordinary profit also needs to be viewed separately, as foreign exchange gains were a contributor in the previous fiscal year and the company forecasts ordinary profit of ¥114.0 billion, down 2.7% year on year. The structure in which operating profit increases while ordinary profit declines should therefore be examined in separate components.

At the first-half earnings announcement, the focus should be not only on simple progress rates for revenue and operating profit but also on the breakdown of non-operating income and expenses, extraordinary income and expenses, and the tax burden. In particular, even if operating profit increases year on year, if net income remains low relative to the plan, special losses or non-operating factors may be constraining the scope to achieve the FY2027 full-year plan.