First-quarter surge nearly uses up half of the first-half forecast; the focus is whether the second quarter, not the second half, can replicate it

In the first quarter of the fiscal year ending March 2027, revenue was ¥1,208.6 million, up 32.4% year on year, and operating profit was ¥193.2 million, up 386.4%. Ordinary profit was ¥188.6 million and net profit was ¥129.0 million, up 542.7% and 540.2%, respectively, from the same period a year earlier. Profit growth exceeded revenue growth, lifting the simple operating margin to 16.0%.

The first-half forecast presented by the company in the first quarter was revenue of ¥2,450 million, operating profit of ¥350 million, ordinary profit of ¥340 million and net profit of ¥230 million. Since the first quarter alone accounted for 49.3% of forecast revenue and 55.2% of forecast operating profit, the second quarter needs revenue of ¥1,241.4 million and operating profit of ¥156.8 million to meet the first-half forecast. This is achievable even if revenue rises 2.7% and operating profit falls 18.9% from the first quarter, meaning that, based solely on the first-half forecast, the second quarter does not need to reproduce the first quarter’s profit level. However, this balance is not the company’s standalone second-quarter forecast; it is the amount required as calculated mechanically from the first-half forecast.

The full-year forecast is revenue of ¥5,000 million, operating profit of ¥580 million, ordinary profit of ¥550 million and net profit of ¥380 million. First-quarter progress against the full-year forecast was 24.2% for revenue and 33.3% for operating profit. Profit is therefore ahead of schedule, while revenue is progressing at roughly an even quarterly pace. At the next results announcement, we need to assess not only standalone second-quarter revenue and operating profit, but also whether the full-year forecast will be maintained, raised or lowered in light of the first-half results.

The company cited higher sales volumes, particularly for materials used in advanced semiconductors, and expanding demand driven by data-center investment for generative AI as factors behind the profit increase. It also explained that a ¥511 million cost variance included in inventory at the end of the previous fiscal year was reflected in cost of sales as the inventory was sold during the current period. Accordingly, the year-on-year profit comparison includes the timing of cost recognition. In the second quarter, it will be important to determine how much of this ¥511 million impact remains and whether profit can be maintained through higher sales volumes alone.

By segment, first-quarter revenue from the photosensitive materials business was ¥738.2 million, with segment profit of ¥105.2 million. Revenue from the chemicals business was ¥470.4 million, with segment profit of ¥87.9 million. Combined segment profit was ¥193.1 million, almost equal to company-wide operating profit of ¥193.2 million. In the second quarter, we will assess whether the first-half surge depends on a single business by reviewing sales volumes and profit for both businesses.