Can the strong Q1 progress and upward revision be demonstrated in the first half?

First-quarter revenue was ¥117.043 billion and operating profit was ¥15.69 billion, up 15.2% and 42.7%, respectively, from the same period a year earlier. The operating margin was approximately 13.4%, an improvement of approximately 2.6 percentage points from approximately 10.8% a year earlier. Operating profit of ¥15.69 billion represents approximately 31.4% of the full-year forecast of ¥50.0 billion, not ¥500.0 billion, exceeding the approximately 25.3% progress rate for revenue. Profit growth outpacing revenue growth is the first factor supporting the upward revision.

The revised first-half forecasts are revenue of ¥222.0 billion, operating profit of ¥24.4 billion, ordinary profit of ¥25.0 billion and interim net profit attributable to owners of the parent of ¥16.6 billion. After deducting first-quarter results, the standalone second quarter requires revenue of ¥104.957 billion, operating profit of ¥8.71 billion, ordinary profit of ¥8.38 billion and net profit of ¥5.90 billion. Operating profit in particular could still meet the plan even after a substantial decline from the first quarter's ¥15.69 billion, but this assumes that strong performance in chemicals and life sciences is not temporary.

The full-year forecasts were also raised from revenue of ¥453.0 billion and operating profit of ¥46.8 billion at the time of the fiscal year ended March 2026 results to revenue of ¥462.0 billion and operating profit of ¥50.0 billion. The ¥3.2 billion increase in the full-year operating profit forecast reflects not only first-quarter profit growth but also an assumption that demand will continue into the second half. However, the company's materials do not disclose the first quarter's progress against the full-year forecasts or the assumptions for foreign exchange rates, raw material prices and volumes. In the first-half results, it will be necessary to determine whether second-quarter profit growth was driven by volume, pricing or foreign exchange, and whether fixed-cost burdens remained within plan.

In the first quarter, the chemicals and life sciences businesses reported higher revenue and operating profit, while the food business reported higher revenue but lower operating profit. Accordingly, achievement of first-half operating profit of ¥24.4 billion depends on whether the two strong businesses can absorb the decline in food profits. In the first-half results, attention should be paid not only to whether the full-year forecast is maintained or revised again, but also to whether the operating margin has fallen materially from the 13% range recorded in the first quarter and to progress against plan by segment.