Can the sharp increase in Q1 profit be replicated in FY2027-H1?

In FY2027-Q1, consolidated revenue was ¥77,661 million, up 24.9% year on year, operating profit was ¥8,657 million, up 80.4%, ordinary profit was ¥8,665 million, up 80.7%, and net profit attributable to owners of the parent was ¥5,708 million, up 92.2%. The operating margin also rose from approximately 7.7% in the year-earlier quarter to approximately 11.1%. This was important because the profit increase was accompanied by improved margins, rather than being attributable solely to higher copper prices.

By segment, Energy and Infrastructure reported revenue of ¥33,584 million and operating profit of ¥6,069 million, for an operating margin of 18.1%. Communications and Components reported revenue of ¥41,886 million and operating profit of ¥2,610 million, for an operating margin of 6.2%. Both segments posted higher revenue and profit year on year. Energy and Infrastructure accounted for approximately 70% of total operating profit of ¥8,657 million, meaning the high profitability of the power infrastructure business is strongly driving company-wide results.

The company raised its full-year plan to revenue of ¥330,000 million, operating profit of ¥33,000 million, ordinary profit of ¥32,200 million and net profit attributable to owners of the parent of ¥23,000 million, and described Q1 progress as 23.5% for revenue and 26.2% for operating profit. The earnings supplementary materials assume 50% of the full-year amount in each of H1 and H2, making ¥165,000 million of revenue and ¥16,500 million of operating profit mechanical benchmarks for H1. However, if contributions from power infrastructure projects and capacity expansion investment are concentrated in H2, falling below these benchmarks would not necessarily conflict with the full-year plan, so the timing of project recognition must also be checked.

In the next H1, we will assess whether Q1's profit-led performance resulted from temporary higher copper prices or project recognition, or whether it is continuing as earnings growth in the growth businesses. The Q1 financial summary did not disclose orders received, order backlog, operating cash flow or investing cash flow. Accordingly, whether these items will be disclosed in H1, and whether supplementary information on orders, production capacity and project progress by segment will be provided, will also be points for review.