FY2027 plan calls for slight revenue growth and lower operating profit; Q1 profit is ahead of schedule

FY2026 revenue was ¥43.288 billion and operating profit was ¥4.378 billion. Against this, full-year FY2027 guidance calls for revenue of ¥44.3 billion, operating profit of ¥4.1 billion, ordinary profit of ¥4.6 billion, and net income attributable to owners of the parent of ¥3.2 billion. Revenue is expected to increase 2.3% from the previous year, while operating profit, ordinary profit and net income are planned to decline by 6.4%, 5.7% and 4.7%, respectively. The plan therefore assumes that a recovery in volumes alone will not fully restore profit levels. The revised targets for the fiscal year ending March 2027 under the medium-term management plan “MORY－PLAN26” are also revenue of ¥44.3 billion, operating profit of ¥4.1 billion and a five-year average ROE of 7.7%, meaning that the current full-year guidance is consistent with the revised targets under the plan.

In Q1, revenue was ¥11.155 billion, up 1.7% year on year, operating profit was ¥1.288 billion, up 19.1%, ordinary profit was ¥1.439 billion, up 15.7%, and net income was ¥952 million, up 10.6%. Progress against full-year guidance was 25.2% for revenue, 31.4% for operating profit, 31.3% for ordinary profit and 29.8% for net income. Revenue was broadly in line with the elapsed-quarter rate, while profit was ahead of revenue. The operating margin was approximately 11.6% in Q1, above the 10.1% recorded for FY2026 as a whole.

The main drivers of the increase in profit were higher selling prices and a slight widening of the spread between selling prices and material prices. In the factors affecting ordinary profit, a lower variable-cost ratio contributed ¥255 million to the increase, while lower production value, higher fixed costs and inventory valuation differences reduced profit by ¥32 million, ¥38 million and ¥34 million, respectively. Accordingly, Q1 profit growth depended more on improvements in price-cost spreads and the variable-cost ratio than on a major recovery in volumes or production, and it remains unclear whether the same margin can be sustained through the second half.

For the next reporting period, FY2027-H1, ¥22.150 billion in revenue and ¥2.050 billion in operating profit serve as simple half-year benchmarks based on dividing the full-year guidance in half. These figures will help determine whether Q1’s profit outperformance was temporary. In particular, if the operating margin falls below 10%, improvement in the second half will be needed to achieve the full-year operating profit forecast of ¥4.1 billion. Conversely, if first-half operating profit clearly exceeds ¥2.050 billion and improvements in the price-material spread and variable-cost ratio continue, concerns about downside risk to the forecast decline in profit will recede.