1Q profit progress significantly outpaced revenue progress

FY2027 1Q revenue was ¥3,430 million, representing progress of 26.4% against the ¥13.0 billion full-year forecast. This was slightly above the 25.0% benchmark based simply on assuming that one quarter of the year had elapsed. Operating profit, meanwhile, was ¥270 million, representing progress of 40.9% against the ¥660 million full-year forecast. Ordinary profit was ¥288 million, or 41.1% of the ¥700 million forecast, while net profit attributable to owners of the parent was ¥187 million, or 37.4% of the ¥500 million forecast. The fact that profit progress is clearly ahead of revenue progress will be the first point to verify in the H1 results.

Compared with the same period of the previous year, revenue increased by ¥546 million, from ¥2,884 million to ¥3,430 million, while operating profit increased by ¥179 million, from ¥91 million to ¥270 million. The operating margin rose 4.7 percentage points, from approximately 3.2% in the same period of the previous year to approximately 7.9%. Accordingly, in H1 it will be necessary to assess not only whether revenue growth continues, but also whether the approximately 7.9% operating margin established in 1Q can be maintained, or whether the margin declines as temporary factors such as advance purchasing and product mix effects fade.

The current full-year forecast is revenue of ¥13.0 billion, operating profit of ¥660 million, ordinary profit of ¥700 million and net profit of ¥500 million. As of the 1Q results, there had been no revision to the latest forecast. In a separate upward revision, the H1 ordinary profit forecast was raised from ¥85 million to ¥340 million, and the full-year ordinary profit forecast was raised from ¥460 million to ¥700 million. How closely the H1 result approaches ¥340 million will be a specific benchmark for assessing the reliability of the full-year forecast.

However, H1 revenue of ¥6.5 billion, H1 operating profit of ¥330 million and H1 net profit of ¥250 million are mechanical reference values obtained by simply halving the full-year forecasts; they are not half-year targets presented by the company. The materials provided do not allow seasonality or the timing of acceptance for government projects to be confirmed quantitatively. In H1, in addition to comparing results with these benchmarks, we will assess whether the forecasts themselves, including full-year revenue of ¥13.0 billion and operating profit of ¥660 million, are maintained.