FY2027-Q1 is broadly on track against the full-year plan, but sustainability through the first half is the key focus

FY2027-Q1 revenue was ¥8,524 million, up 3.6% year on year, while operating profit was ¥355 million, up 62.5%. The full-year forecasts are revenue of ¥35,000 million and operating profit of ¥1,450 million, putting first-quarter progress at 24.4% and 24.5%, respectively. These figures are broadly in line with the 25% passage of the fiscal year, so at least for revenue and operating profit, it is difficult to say that the company is significantly behind its full-year forecasts at this point.

Compared with the same period of the previous fiscal year, revenue growth was limited to 3.6%, while operating profit increased by ¥137 million, from ¥218 million to ¥355 million. The operating margin rose by approximately 1.5 percentage points, from approximately 2.7% in the same period of the previous fiscal year to approximately 4.2% in the current quarter. The improvement appears to have been driven by higher volumes, differences in inventory valuation and cost reductions. However, the company has not disclosed the monetary breakdown by profit driver or actual sales volumes.

Ordinary profit was ¥623 million, representing progress of 31.2% against the full-year forecast of ¥2,000 million. This exceeds progress on operating profit, but the full-year forecast itself is down 10.3% from the previous fiscal year’s actual result of ¥2,229 million. Accordingly, even if operating profit improves in the first half, the possibility remains that foreign exchange, the share of profit or loss of equity-method investees, and non-operating income and expenses could weigh on ordinary profit. Profit attributable to owners of the parent was ¥545 million, reaching 45.4% of the full-year forecast of ¥1,200 million, but it includes the impact of extraordinary income and therefore cannot be assessed on the same basis as operating profit or ordinary profit.

In FY2027-Q1, the allocation method for some selling, general and administrative expenses was changed, and segment comparisons with the same period of the previous fiscal year have been made using the revised method. At the next results release, it will be necessary to check not only progress on revenue, operating profit and ordinary profit in FY2027-H1, but also which segments and to what extent they were affected by the change in allocation method, as well as whether the full-year operating profit forecast of ¥1,450 million is maintained.