Q1 broadly on track for the full-year plan, with the details of the first-half upward revision the next focus

Revenue for the first quarter of the fiscal year ending March 2027 was ¥40,567 million, up 6.4% year on year, while operating profit was ¥1,400 million, up 76.3%. Ordinary profit was ¥1,253 million, and net income attributable to owners of the parent was ¥730 million, returning to profitability from a net loss in the year-earlier quarter. The full-year forecasts are revenue of ¥166,000 million, operating profit of ¥6,400 million, ordinary profit of ¥5,100 million and net income of ¥3,100 million, putting Q1 progress at 24.4% for revenue and 21.9% for operating profit.

On the simple assumption that one quarter represents 25% of the full year, revenue was broadly on plan, while operating profit was approximately 3.1 percentage points behind. Excluding Q1 results, the remaining full-year amount is ¥125,433 million in revenue and ¥5,000 million in operating profit, meaning operating profit must build to approximately 3.6 times the Q1 level over the remaining 3 quarters. The company has not disclosed its own required achievement levels after taking into account Q1 progress against the full-year forecast and seasonality.

The company assessed Q1 results as better than initially expected and revised its first-half forecast upward, while leaving the full-year forecast unchanged because of the uncertain business environment. However, the earnings figures provided do not identify the revised first-half revenue and operating profit amounts or the amounts attributable to each factor behind the upward revision. Under a simple 50% benchmark, first-half revenue of ¥83,000 million and operating profit of ¥3,200 million would be the reference levels, requiring Q2 revenue of ¥42,433 million and operating profit of ¥1,800 million on a standalone basis, although these are not company forecasts.

In FY2027-H1, the first priority is to assess the extent of the cushion between first-half results and the revised forecast. In particular, it will be important to see whether the spring business, where sales volumes continue to rise, and the equipment business, where orders were described as strong, continue to contribute in Q2 rather than having made only a temporary contribution in Q1. Another point to assess is whether leaving the full-year forecast unchanged was appropriate, or whether the first-half upside leaves room for another upward revision to the full-year forecast.