Can the strong Q1 performance and the full-year plan after the upward revision be maintained in FY2027-H1?

In FY2027-Q1, revenue was ¥91,624 million, up 11.8% year on year, and operating profit was ¥13,663 million, up 16.8%. The full-year forecast has been raised to revenue of ¥372,300 million, operating profit of ¥45,000 million, ordinary profit of ¥47,400 million, and profit attributable to owners of the parent of ¥35,200 million. Q1 progress against the full-year forecast was 24.6% for revenue and 30.4% for operating profit, with profit running ahead of revenue.

The latest upward revision was ¥2,800 million for revenue, ¥1,200 million for operating profit, ¥1,300 million for ordinary profit, and ¥700 million for net profit, compared with the previous forecasts. The company attributed the revision to changing its assumed exchange rates from ¥155 to ¥158 per US dollar and from ¥22 to ¥23 per yuan, as well as to performance above assumptions in the Asia, Japan, and Europe segments. Accordingly, in FY2027-H1 it will be necessary to distinguish the translation effect of yen depreciation from revenue growth driven by actual sales volumes and product competitiveness.

Meanwhile, despite the increase in operating profit, Q1 ordinary profit was ¥14,491 million, down 10.1% year on year, and net profit was ¥10,650 million, down 9.5%. The main reason was said to be the decline from the one-off dividend income recorded in the prior-year quarter, meaning that the improvement at the operating level has not flowed through directly to ordinary profit and net profit. As this adverse comparison will run its course by the interim period, an important point to monitor is whether ordinary profit and net profit return to growth alongside operating profit.

For the FY2027-H1 assessment, ¥186,150 million of revenue and ¥22,500 million of operating profit, half of the full-year forecasts, will be used as simple progress benchmarks. However, these are not the company’s own targets adjusted for seasonality. Rather than applying a mechanical pass-or-fail test, the focus will be on whether Q1’s margin improvement continues into the second quarter and whether the company maintains its full-year forecast after the upward revision.