Confirm whether the full-year forecast can be reached even excluding the consolidation effect of the ReNova business

FY2027-Q1 consolidated revenue was ¥48,191 million, operating income was ¥2,297 million, ordinary income was ¥2,297 million, and net income attributable to owners of the parent was ¥3,498 million. The full-year forecasts have been revised to revenue of ¥194,600 million, operating income of ¥6,500 million, ordinary income of ¥5,600 million, and net income of ¥5,400 million. On a simple calculation, first-quarter progress rates are therefore 24.8% for revenue, 35.3% for operating income, 41.0% for ordinary income, and 64.8% for net income. Because the net income progress rate was affected by extraordinary income, progress in operating income and ordinary income should be given greater weight in H1.

The new consolidation of the ReNova business acquired in April 2026 made a significant contribution to the increase in revenue and earnings. The earnings supplementary materials report first-quarter revenue of ¥12.9 billion, operating income of approximately ¥500 million, and an operating margin of 3.9% for the ReNova business. Accordingly, FY2027-H1 needs to distinguish the mechanical increase in revenue from extending the consolidation period for the business from 3 months to 6 months from changes in the existing resin-processed products and chemicals businesses.

The company explained that the upward revision to the full-year forecasts reflects not only the consolidation effect of the acquired business but also a ¥2.172 billion gain on the recognition of negative goodwill. Operating income will need to build on the consolidation effect of ReNova, the existing businesses in Japan and North America, and higher chemicals sales and the effects of price revisions, rather than on one-off gains. The earnings supplementary materials do not provide sufficient numerical detail on progress against the full-year forecasts, the profit level required over the remaining period, or the consolidated group's self-assessment against plan.

At the next earnings release, we will want to see how far H1 cumulative revenue exceeds the simple six-month benchmark of ¥97.3 billion and operating income of ¥3.25 billion. It will also be important to determine whether ReNova's revenue and operating income have improved from their post-acquisition levels, whether the existing businesses alone have exceeded the prior-year level of operating income, and whether the company provides an assessment against its first-half ordinary income forecast of ¥2.8 billion. If organic growth excluding the acquisition effect and the costs and depreciation burden associated with consolidation are not disclosed, the quality of the full-year forecast earnings will need to be assessed cautiously.