Q1 saw a sharp decline in operating profit despite only a modest drop in revenue; FY2027-H1 will be a period for confirming a recovery in core profitability

FY2027-Q1 consolidated revenue was ¥18,211 million, down 2.2% year on year. Operating profit was ¥1,195 million, ordinary profit was ¥1,357 million, and net income attributable to owners of the parent was ¥1,628 million. Operating profit fell 19.4% year on year and ordinary profit fell 32.1%. Operating profit declined more sharply than revenue, indicating that deterioration in profitability is leading the downturn.

The operating margin calculated from revenue and operating profit fell approximately 1.4 percentage points, from approximately 8.0% in the year-earlier period to approximately 6.6% in the current quarter. The company cited lower domestic glass bottle shipments and production, lower sales of glass-making equipment, lower plastic container shipments in China, and higher raw material prices due to the situation in the Middle East as factors behind the decline in profit. However, it did not disclose a quantified bridge separating the effects of volume, selling prices, raw materials and repairs.

By segment, the glass bottle-related business generated revenue of ¥11,130 million and profit of ¥733 million, down 31.1% year on year. The plastic container-related business generated revenue of ¥2,396 million, roughly unchanged year on year, but profit was ¥192 million, down 26.3%. Meanwhile, the logistics-related business generated profit of ¥269 million, up 46.7%, and the new glass-related business generated profit of ¥186 million, up 32.8%. The decline in profit was concentrated in the two core businesses.

The full-year forecasts are revenue of ¥72,000 million, operating profit of ¥2,600 million, ordinary profit of ¥2,800 million and net income of ¥2,900 million. Although first-quarter progress toward the operating profit forecast has reached approximately 46.0%, profit is down year on year, leaving ¥1,405 million of operating profit still required in H1. In FY2027-H1, it will be necessary to monitor whether the operating margin falls below 6.6%, whether the declines in profit at the glass bottle and plastic container businesses narrow, and how much price revisions offset higher raw material costs and lower volumes.