FY2027-H1: Assessing the lag in profit progress against the full-year plan and the contribution from second-half initiatives

FY2027-Q1 revenue was ¥221,919 million, up 5.1% year on year, while operating profit was ¥11,462 million, up 13.9%. The full-year forecasts are ¥1,027,000 million in revenue and ¥76,000 million in operating profit, implying progress of 21.6% for revenue and 15.1% for operating profit on a simple calculation. Compared with the 25% elapsed ratio for the first quarter, this is approximately 3.4 percentage points lower for revenue and 9.9 percentage points lower for operating profit, indicating that profit progress is particularly slow at this stage.

This lag should be considered alongside the possibility that the full-year plan incorporates a certain contribution from second-half business events. In the US, the acquisition of assets for the ready-mixed concrete business was completed on 5 June 2026. The assets include 41 ready-mixed concrete plants, 2 cement terminals and other facilities, for an acquisition price of $712 million. Tokuyama Taiheiyo, which took over Tokuyama's cement sales business, reportedly began operations on 30 September 2026, and both businesses could contribute during part of FY2027-H1.

However, revenue recognition immediately after the acquisition, acquisition-related expenses, depreciation, logistics costs, integration costs and higher working capital could weigh on profit. In FY2027-H1, key points will be whether revenue and operating profit from the acquired assets can be disclosed separately from the existing US business, how much Tokuyama Taiheiyo's sales volume and price revisions have contributed, and whether the company explains the profit level required during the remaining period to achieve the full-year forecast of ¥76,000 million.

In particular, if H1 cumulative revenue does not reach ¥513,500 million and operating profit does not reach ¥38,000 million, achieving the full-year plan will require stronger seasonality or a greater acquisition contribution in the second half. The first-quarter profit increase should not be used alone to assess progress toward the plan. H1 progress, cement price variances, recovery in US business volumes and Tokuyama Taiheiyo's consolidated contribution should be assessed together.