First-quarter profit progress is extremely far behind the full-year plan.

In the first quarter of the fiscal year ending March 2027, revenue was ¥700.719 million, down 10.3% from ¥781.427 million in the same period of the previous year, while operating profit was ¥6.013 million, down 89.9% from ¥59.691 million. Ordinary profit was ¥9 million and quarterly net profit was ¥7 million, meaning the company remained profitable, although the decline in operating profit was substantial. Progress against the full-year forecasts was approximately 17.5% for revenue, based on the ¥4,000 million forecast, and approximately 2.2% for operating profit, based on the ¥270 million forecast.

If full-year forecasts are allocated evenly across the quarters, the benchmark through the end of the first half would be revenue of ¥2,000 million and operating profit of ¥135 million. However, the company's business mix is affected by the timing of public works and individual projects, and it has not disclosed figures indicating its first-half company plan or seasonality. Accordingly, ¥2,000 million and ¥135 million should be treated not as company targets but as mechanical benchmarks for measuring progress in the results.

Extrapolating from first-quarter results, standalone second-quarter revenue would need to be approximately ¥1,299.281 million and operating profit approximately ¥128.987 million to reach these benchmarks. Even if the full-year forecasts are achieved, revenue of ¥3,299.281 million and operating profit of ¥263.987 million will remain after the first quarter, requiring average quarterly revenue of approximately ¥1,099.760 million and operating profit of approximately ¥87.996 million over the remaining 3 quarters. The focus will be on the extent to which project progress and profitability recover from first-quarter operating profit of ¥6.013 million.

The company had not revised its full-year forecasts as of the first quarter and maintained revenue of ¥4,000 million, operating profit of ¥270 million, ordinary profit of ¥274 million and net profit of ¥200 million. However, it has not disclosed the amounts of the impact from orders received and order backlog, project delays or surging material prices. In the second quarter, it will be important to quantify not only whether the full-year forecasts remain unchanged, but also the order backlog, projects with delayed delivery dates and profitability after price pass-through.