How much of the FY2027-Q1 loss can be recovered in FY2027-H1

FY2027-Q1 revenue was ¥2,012 million, down 15.8% from ¥2,390 million in the same period of the previous year. Operating income turned from a ¥103 million profit to a ¥28 million loss, ordinary income from a ¥122 million profit to a ¥7 million loss, and quarterly net income attributable to owners of the parent from a ¥76 million profit to a ¥28 million loss. The operating margin also fell by approximately 5.7 percentage points, from approximately 4.3% to approximately −1.4%.

The decline in earnings was attributable to lower sales volumes of carriers for electrophotography, reflecting weaker demand from major customers and the backlash from product deliveries being brought forward in the previous fiscal year. The ordinary profit bridge in the supplementary financial materials shows a volume and sales-mix variance of −¥270 million, a sales-price variance of +¥80 million, a variable-cost unit-price variance of −¥50 million, manufacturing fixed costs of +¥40 million, inventory factors of −¥20 million and SG&A expenses of +¥20 million. Although price adjustments and cost reductions absorbed part of the impact, the effect of lower volume was the largest factor.

Meanwhile, the company maintained its full-year forecasts of ¥9,600 million in revenue, ¥510 million in operating profit, ¥530 million in ordinary profit and ¥330 million in net income attributable to owners of the parent. Simply deducting Q1 results means that the remaining 3 quarters must generate ¥7,588 million in revenue, ¥538 million in operating profit, ¥537 million in ordinary profit and ¥358 million in net income. On a simple half-year progress basis, ¥4,800 million in revenue and ¥255 million in operating profit would be benchmarks for FY2027-H1, although no quantitative explanation of first-half and second-half seasonality has been confirmed from the company.

In FY2026-H1, revenue was ¥4,551 million, operating profit was ¥189 million, ordinary profit was ¥215 million and net income was ¥126 million. Accordingly, in the upcoming first-half results, we will assess not only the year-on-year recovery but also how closely results meet the simple half-year progress benchmarks against the full-year forecasts. FY2027-Q1 did not include a quarterly statement of cash flows, and operating cash flow was not disclosed, so FY2027-H1 will also need to confirm whether cash is being generated alongside the recovery in earnings.