First-quarter operating profit exceeds the full-year forecast, but the key focus is whether this can be sustained through the first half and full year

The first quarter, from April to June 2026, generated revenue of ¥761,592 million, operating profit of ¥126,915 million and profit attributable to owners of the parent of ¥84,006 million. By comparison, the full-year forecast for the fiscal year ending March 2027 is revenue of ¥2,870,000 million, operating profit of ¥102,000 million and profit attributable to owners of the parent of ¥44,000 million. Simple progress rates were 26.5% for revenue, 124.4% for operating profit and 190.9% for profit attributable to owners of the parent, meaning profit is running far ahead of revenue.

If the full-year forecast is left unchanged and the figures are simply subtracted, revenue required from the second quarter onward would be ¥2,108,408 million, while operating profit would be negative ¥24,915 million and profit attributable to owners of the parent would be negative ¥40,006 million. These residual amounts do not mean that the company is forecasting losses from the second quarter onward; they are mechanical balances that do not take quarterly market fluctuations or seasonality into account. However, since first-quarter operating profit alone exceeded the full-year forecast, the first-half results will need to clarify the extent of market deterioration and second-half losses assumed by the company.

Operating profit in the same quarter of the previous year was ¥7,987 million, so operating profit increased by ¥118,928 million in the first quarter. The operating margin also rose from approximately 1.2% in the same quarter of the previous year to approximately 16.7% in the current period. However, full-year operating profit for the fiscal year ended March 2026 was ¥144,790 million. Although the company earned most of its forecast operating profit for the fiscal year ending March 2027 in the first quarter alone, it was still ¥17,875 million below the previous full-year result. It would be premature to regard the first quarter's sharp recovery as sustainable full-year earnings power until additional first-half results are available.

For the first-half results, it will be important to confirm not only whether operating profit exceeds ¥102.0 billion, but also the volume and price drivers of revenue and whether the company assumes a profit decline in the second half. If the full-year forecast is not revised, segment-level explanations will be needed to determine whether first-quarter profit resulted from a temporary improvement in market conditions or whether a significant deterioration in second-half margins has been factored in.