First-quarter progress is lagging more in operating profit than in revenue versus the full-year forecast, making an H1 recovery necessary

First-quarter FY2027 revenue was ¥4,280 million, down 4.4% year on year, while operating profit was ¥339 million, down 29.9%. Ordinary profit was ¥410 million, down 26.8%, and profit attributable to owners of the parent was ¥263 million, down 25.7%. Profit declined more sharply than the top line. Progress against the full-year forecast was 4,280 ÷ 22,200, or 19.3%, for revenue, and 339 ÷ 3,520, or 9.6%, for operating profit.

The full-year forecast is revenue of ¥22,200 million and operating profit of ¥3,520 million. Using a simple even allocation across six months as a benchmark, FY2027-H1 revenue would be ¥11,100 million and operating profit would be ¥1,760 million. After subtracting first-quarter results, the calculation indicates that second-quarter revenue alone would need to reach ¥6,820 million and operating profit ¥1,421 million. Operating profit, in particular, would need to accelerate sharply from the first-quarter result of ¥339 million. These figures are not company forecasts and should be treated as mechanical benchmarks for measuring progress in the next earnings report.

Compared with the previous fiscal year, FY2026 revenue was ¥21,243 million and operating profit was ¥3,544 million, while the FY2027 company forecast calls for revenue growth of 4.5% but a 0.7% decline in operating profit. In other words, the company expects annual revenue to increase while operating profit remains broadly flat. H1 will need to establish whether the first-quarter revenue decline and 29.9% drop in operating profit reflect a temporary shift in shipment timing or demand and profitability deterioration that undermines the assumptions behind the full-year forecast.

The company cited lower product shipments for large projects and a decrease in carried-over order backlog as factors behind the first-quarter revenue decline, and also referred to higher material and raw-material prices on the profit side. At the same time, it explained that orders for large projects in the sluice gate and weir business increased, its in-house production ratio rose, and more repair work carried over from the previous period was completed. The next report should show whether these positive factors translated into the second-quarter benchmarks of ¥6,820 million in revenue and ¥1,421 million in operating profit, and whether the company begins disclosing order intake and order backlog in monetary terms.