Q1 profit progress is lagging revenue against the full-year forecast, making H1 recovery the key focus

In Q1 of FY2027 ending March 2027 (1 April to 30 June 2026), consolidated revenue was ¥2,055 million and operating profit was ¥44 million. In the same period of the previous year, revenue was ¥1,918.521 million and the company reported an operating loss of ¥145.360 million. Revenue therefore increased 7.1% year on year, while operating results moved into the black. Although the headline figures improved, the standalone quarterly operating margin was only about 2.2%, still below the margin assumed in the full-year plan.

The company’s full-year forecasts are revenue of ¥14,000 million, operating profit of ¥690 million, ordinary profit of ¥630 million, and net income attributable to owners of the parent of ¥800 million. On a simple calculation, Q1 progress was 14.7% for revenue, 6.4% for operating profit, and 61.9% for net income. Compared with the 25% benchmark implied by the passage of time, revenue and operating profit are progressing slowly, while net income is running well ahead, which warrants attention.

The high progress rate for net income reflects a ¥683.040 million gain on the sale of investment securities recorded in Q1. Accordingly, the ¥495 million in net income cannot simply be treated as progress toward the full-year target. At the next earnings announcement, it will be important to check not only whether first-half cumulative revenue reaches ¥7,000 million and operating profit reaches ¥345 million, half of the full-year plan, but also whether the operating margin is approaching the approximately 4.9% full-year forecast level.

The scheduled earnings announcement date is 10 November 2026. At the half-year results, the key question will be whether the assumption of a substantial build-up in revenue and profit in the second half remains in place, or whether the full-year forecast is revised because of supply constraints affecting raw materials and auxiliary materials or changes in the production plan. In particular, if revenue alone continues to grow while operating profit lags, it will be necessary to determine whether the absorption of fixed costs from higher orders was temporary or whether margin improvement from product mix and price revisions is continuing.