Revenue up, operating profit down; FY2027 full-year forecast broadly on track as of Q1

Revenue in Q1 of the fiscal year ending March 2027 was ¥25.133 billion, up ¥1.876 billion, or 8.1%, from ¥23.257 billion in the year-earlier quarter. Operating profit, however, was ¥2.248 billion, down ¥117 million, or 4.9%, from ¥2.365 billion. Ordinary profit was ¥2.547 billion, up 0.6%, while profit attributable to owners of the parent was ¥1.869 billion, up 2.4%, resulting in revenue growth but a decline in operating profit alone.

The full-year forecasts remain unchanged at ¥100.0 billion in revenue, ¥7.1 billion in operating profit, ¥7.6 billion in ordinary profit and ¥7.5 billion in profit attributable to owners of the parent. Q1 revenue progress was 25.1% and operating profit progress was 31.7%, with profit progress 6.5 percentage points ahead of revenue progress. However, seasonality and the concentration of profit by business are not disclosed, so ¥50.0 billion in revenue and ¥3.550 billion in operating profit should be used as mechanical benchmarks for H1 assessment, not as interim targets under the company plan.

The operating margin was 8.9% in Q1, down 1.3 percentage points from 10.2% in the year-earlier quarter. Domestic food posted higher revenue but lower profit, overseas operations returned to profitability, and domestic chemical products and other operations posted a slight profit increase. The decline in the consolidated margin appears to reflect the combined effects of higher costs, including personnel expenses, and the business mix, rather than one specific business alone. In the full fiscal year ended March 2026, revenue was ¥96.3 billion and operating profit ¥6.9 billion, for an operating margin of 7.2%, down from 9.1% in the previous fiscal year. H1 therefore needs to be assessed not only against the year-earlier period but also for recovery in the full-year margin.

At the next earnings announcement, the focus will be on whether the increase in revenue reflects the monetary effect of price revisions or is accompanied by higher sales volumes and an improved product mix. For operating profit, the effects of the change in the estimate for asset retirement obligations, personnel expenses, energy costs and logistics costs should be separated into one-off and ongoing factors, and it should be tested whether the cumulative H1 operating margin can remain in the 9% range. Even if the earnings forecast is not revised, it will be important to see whether the assumptions underlying the full-year forecast and the amount of associated risks become more specific as of H1.