Can the sharp increase in Q1 profit be sustained through FY2027-H1?

The first quarter, from April to June 2026, generated revenue of ¥28,923 million, operating profit of ¥1,549 million, ordinary profit of ¥2,534 million and quarterly net profit attributable to owners of the parent of ¥1,775 million. Revenue rose 7.4% year on year, while operating profit increased 90.3%, ordinary profit 100.4% and net profit 270.9%, meaning profit grew faster than revenue. The ¥735 million improvement from operating profit of ¥814 million in the prior-year quarter provides a starting point for assessing the reversal of the cost pressures that emerged in FY2026.

The company’s FY2027 full-year forecast is revenue of ¥115,000 million, operating profit of ¥6,700 million, ordinary profit of ¥8,700 million and net profit of ¥5,700 million. Q1 progress rates were therefore 25.2%, 23.1%, 29.1% and 31.1%, respectively. Revenue was broadly in line with the passage of one quarter, operating profit was somewhat behind, and ordinary profit and net profit were ahead. This is, however, a mechanical calculation that does not take seasonality into account. It does not mean that the company has set the simple midyear H1 benchmarks of revenue of ¥57,500 million, operating profit of ¥3,350 million, ordinary profit of ¥4,350 million and net profit of ¥2,850 million as targets.

Compared with FY2026 actual results, the FY2027 forecast calls for revenue to rise 6.4%, from ¥108,040 million to ¥115,000 million; operating profit to increase 7.2%, from ¥6,248 million to ¥6,700 million; ordinary profit to increase 1.2%, from ¥8,595 million to ¥8,700 million; and net profit to increase 17.4%, from ¥4,855 million to ¥5,700 million. The Q1 financial results summary confirms that the full-year forecast was revised, but does not disclose the pre-revision revenue and profit forecasts or the changes in each item. In H1, it will be important to determine whether the company can provide additional details on the businesses and factors underpinning the forecast increase.

Next time, we will review the four cumulative H1 profit measures, segment profit for Industrial Products and Household Products, the extent to which price revisions have taken effect, and the impact of foreign exchange and antimony prices. Even if operating profit exceeds ¥3,350 million, the confidence level in the full-year forecast of ¥6,700 million will differ depending on whether the increase reflects price pass-through and normalization of raw material prices or improvements in volume and capacity utilization. We will also assess whether the company provides additional monetary disclosures by factor, rather than merely maintaining or revising the forecast.