Q1 revenue was in line with plan and profit was ahead of schedule, but Q2 will test the pattern of higher revenue and lower profit.

FY2027-Q1 consolidated revenue was ¥14,840 million, up 4.0% year on year. Operating profit was ¥973 million, down 0.2%, ordinary profit was ¥771 million, down 1.2%, and quarterly net profit attributable to owners of the parent was ¥537 million, up 7.5%. Revenue increased, but operating profit and ordinary profit fell below the year-earlier levels. The operating margin was approximately 6.56% in the current period versus approximately 6.83% in the same period of the previous year. Margins did not deteriorate significantly, but Q2 will need to confirm why higher revenue has not translated directly into higher operating profit.

The full-year forecasts are ¥65,000 million in revenue, ¥3,300 million in operating profit, ¥2,450 million in ordinary profit and ¥1,500 million in net profit. Progress as of Q1 was 22.8%, 29.5%, 31.5% and 35.8%, respectively. The company described revenue as progressing smoothly and each level of profit as generally ahead of expectations, but it is too early to judge full-year achievement solely on the basis of the high profit progress in Q1. In particular, real estate sales may be affected by timing differences arising from when properties are handed over. H1 should therefore be assessed against whether revenue reaches ¥32,500 million and operating profit reaches ¥1,650 million, half of the full-year forecasts.

By segment in Q1, the DX Promotion Business turned profitable, with operating profit of ¥102 million versus an operating loss of ¥83 million in the same period of the previous year. Meanwhile, operating profit in the DX Real Estate Business was ¥1,206 million, down 9.0% year on year. Company-wide adjustments were also negative by ¥335 million on an operating profit basis, so the extent to which segment improvements flow through to consolidated profit needs to be assessed including adjustments and head-office costs. The company also did not prepare a quarterly cash flow statement for Q1, meaning that operating cash flow and the actual status of debt repayments can only be confirmed for the first time in the H1 disclosure.