Will the operating improvement in FY2027-Q1 continue through the first half and full-year plan?

FY2027-Q1 revenue was ¥12,773 million, up 1.5% year on year. Operating profit was ¥434 million, ordinary profit was ¥384 million, and quarterly net income attributable to owners of the parent was ¥263 million, representing substantial improvement from the respective levels in the same quarter of the prior year. Operating profit in particular increased by ¥281 million, or 183.9%, confirming profit improvement that outpaced revenue growth.

The company's FY2027 full-year forecasts are revenue of ¥49,600 million, operating profit of ¥1,270 million, ordinary profit of ¥760 million and net income attributable to owners of the parent of ¥510 million. Q1 progress against the full-year forecasts was 25.8% for revenue, 34.2% for operating profit, 50.5% for ordinary profit and 51.6% for net income. Ordinary profit and net income alone appear to be progressing strongly even though no first-half forecast has been disclosed, but Q1 extraordinary gains and losses were limited to a ¥1 million gain on the sale of property, plant and equipment and a ¥7 million loss on the disposal of property, plant and equipment. Future tax expenses and fluctuations in non-operating income and expenses therefore need to be monitored.

In FY2026, revenue was ¥49,619 million, operating profit was ¥1,268 million, ordinary profit was ¥483 million and net income was ¥213 million. The current full-year operating profit forecast of ¥1,270 million is only ¥2 million above the prior-year result. By contrast, the ordinary profit forecast is ¥760 million and the net income forecast is ¥510 million, incorporating relatively substantial improvement below the operating profit line. In FY2027-H1, it will be important to assess not only the build-up of operating profit, but also how fully the assumptions for non-operating income and expenses, taxes and extraordinary gains and losses are being realized.

The Q1 financial results summary included no revision to the full-year forecasts, and the annual dividend forecast was maintained at ¥5 per share. However, the disclosures available this time do not include standalone first-half forecasts for revenue or operating profit, nor do they specify the level of profit expected in the second half. Accordingly, in FY2027-H1, we will check not only simple progress against the full-year forecasts, but also whether the full-year forecasts are maintained or revised after the H1 results, the demand and cost assumptions for the second half, and whether the company explains profit seasonality. The Q1 results also did not include a quarterly cash flow statement, so the conversion of profit into cash can only be assessed for the first time in the H1 results.