FY2027-Q1's sharp recovery was broadly on track against the full-year forecast; sustainability to be confirmed in H1

FY2027-Q1 revenue was ¥97,609 million, up 30.6% year on year, operating profit was ¥3,739 million, up 146.1%, ordinary profit was ¥3,366 million, up 229.5%, and quarterly net profit attributable to owners of the parent was ¥2,359 million, up 257.6%. Operating profit growth substantially outpaced revenue growth, improving the operating margin from approximately 2.03% in the year-earlier quarter to approximately 3.83%.

Q1 progress against the full-year forecast was 22.0% for revenue, 21.3% for operating profit, 20.9% for ordinary profit and 19.4% for net profit. On a simple assumption of even quarterly progress, this does not represent a significant shortfall, but net profit progress is lower than operating profit progress, requiring confirmation of below-operating items, including non-operating income and expenses and the tax burden. In H1, the mechanical comparison thresholds are revenue of ¥221,400 million, operating profit of ¥8,775 million, ordinary profit of ¥8,045 million and net profit of ¥6,075 million, each representing 50% of the full-year forecast.

The company attributed the increases in revenue and profit to higher sales of die-casting and cast-metal materials for automobiles and motorcycles in Japan and overseas, higher prices for secondary aluminum alloys, efforts to correct product prices in Japan, and wider spreads between product selling prices and raw material prices overseas. It has not disclosed a breakdown of the contribution amounts showing how many hundreds of millions of yen each of pricing, volume, raw material costs and overseas-site improvements added to operating profit.

In H1 FY2027, it will be necessary to determine whether the increase in revenue was driven by sales volume or primarily by price factors related to aluminum prices and product prices. It will also be necessary to confirm whether the operating margin remains around Q1's 3.83%, whether the gap between ordinary profit and operating profit widens, and whether the full-year forecast or the ¥90 dividend forecast is revised.