Given the seasonal pattern, FY2027-Q1 will be a period for assessing improvements in orders and the size of the loss.

Many of the company's contracts for commissioned work run through the end of March, and roughly one-third of annual revenue is recorded in March. Fixed costs such as personnel expenses and selling expenses are incurred broadly evenly each month, creating a seasonal structure in which an operating loss is normally reported through the second quarter. Accordingly, for FY2027-Q1, more weight should be placed on the build-up of orders and progress on projects toward revenue recognition than on simple progress of one-quarter of the full-year profit forecast.

Looking at past first quarters, FY2025-Q1 revenue was ¥1,100 million and the operating loss was ¥51 million, compared with revenue of ¥950 million and an operating loss of ¥58 million in FY2026-Q1. Revenue declined approximately 13.6% year on year, while the operating loss widened by ¥7 million. Although FY2026 full-year revenue recovered to ¥5,587 million and operating profit to ¥267 million, the weak start in Q1 makes it the first point of verification whether the same pattern will continue in FY2027-Q1.

In contrast, FY2026 full-year order intake was ¥7,845.8 million and the order backlog was ¥4,935.7 million, up 44.3% and 84.4%, respectively, from the previous fiscal year. The fact that large-scale plant construction projects extend into the following fiscal year and beyond indicates that higher orders do not immediately translate into revenue. It will be important to assess how much of this backlog was transferred to revenue in FY2027-Q1 and whether new orders replenished the balance, in order to distinguish seasonality from the underlying strength of the business.

The FY2027 full-year forecasts are revenue of ¥6,200 million, operating profit of ¥340 million and ordinary profit of ¥310 million. The minimum comparison points will be whether Q1 revenue exceeds ¥950 million and whether the operating loss is contained within ¥58 million, while also checking order intake, order backlog, progress on construction projects, and changes in work in progress and contract assets. Even if a loss can be accepted because of seasonality, the key issue in the next results will be whether the increase in the order backlog represents an accumulation of profitable projects, rather than merely delayed revenue recognition.