Q1 operating profit ran ahead of revenue; H1 will test the sustainability of the ¥320 million full-year forecast

In Q1 from April to June 2026, revenue was ¥2,537 million and operating profit was ¥160 million. Revenue increased 1.6% year on year and operating profit increased 8.7%, while the operating margin rose to approximately 6.3% from approximately 5.9% in the same period of the previous year, an increase of approximately 0.4 percentage points. Progress against the full-year revenue forecast of ¥9,500 million was 26.7%, only slightly ahead of the 25% of the year elapsed, but operating profit had already reached 50.0% of the ¥320 million full-year forecast, putting profit progress well ahead of revenue progress.

Assuming that the company earns half of its full-year forecast in the first half, the cumulative second-quarter benchmarks are revenue of ¥4,750 million and operating profit of ¥160 million. Operating profit reached this benchmark in Q1 alone, so even if standalone second-quarter operating profit is nearly zero, the first half would still reach the 50% benchmark. By contrast, Q1 ordinary income was ¥235 million, or 39.8% of the ¥590 million full-year forecast, and quarterly net income attributable to owners of the parent was ¥149 million, or 33.9% of the ¥440 million full-year forecast. The early progress in operating profit has therefore not flowed through directly to bottom-line earnings.

The full-year operating profit forecast is ¥320 million, down 28.3% from actual operating profit of ¥446 million in the fiscal year ended March 2026. It is therefore too early to conclude that the full-year plan will be exceeded based only on Q1 operating profit growth. The company attributed the increase in Q1 operating profit to solid overseas sales and price revisions, as well as reductions in selling, general and administrative expenses, while also explaining that manufacturing costs had increased. Next time, we will check whether revenue growth from price revisions is continuing and whether higher raw material, procurement, and manufacturing costs have again pressured the margin that had improved.

A particularly important point is that the ¥160 million Q1 operating profit has not been broken down by amount into price revisions, sales volume, overseas sales, and cost reductions. In the cumulative second quarter, we will confirm whether the operating margin can remain at or above 6.0%, whether operating profit progress against the full-year forecast exceeds 50%, and how far progress in ordinary income and net income improves from 39.8% and 33.9%, respectively.