First-quarter profit progress is ahead; testing the repeatability of the full-year forecast in the first half

In FY2027-Q1, revenue was ¥22,258 million, operating profit was ¥3,963 million, ordinary profit was ¥3,798 million, and quarterly net profit attributable to owners of the parent was ¥2,541 million. The full-year forecasts are ¥66,000 million, ¥10,400 million, ¥8,900 million and ¥6,100 million, respectively, producing simple progress rates of 33.7%, 38.1%, 42.7% and 41.7%. The first point to review in the next results is that profit progress is approximately 4 to 9 percentage points ahead of revenue progress.

Compared with the same period of the previous fiscal year, revenue increased from ¥10,419 million to ¥22,258 million, while operating profit increased from ¥2,571 million to ¥3,963 million. However, the operating margin declined from approximately 24.7% in the same period of the previous fiscal year to approximately 17.8% in the current quarter. As profit growth was relatively modest against the sharp increase in revenue, FY2027-H1 should be reviewed for the product mix, cost of sales, and changes in SG&A expenses to determine whether the high profit progress rate reflects temporary product-recognition timing.

The mechanical 50% first-half benchmarks are revenue of ¥33,000 million, operating profit of ¥5,200 million, ordinary profit of ¥4,450 million and net profit of ¥3,050 million. These are not first-half targets provided by the company, but merely comparison benchmarks obtained by dividing the full-year forecasts in half. However, as of the end of Q1, revenue had already exceeded one-third of the full-year forecast and ordinary profit had exceeded 40%, so a significant shortfall against these benchmarks in H1 would increase the likelihood that Q1 strength reflected project pull-forward or sales timing.

The full-year forecasts at the end of Q1 were revenue of ¥66,000 million, operating profit of ¥10,400 million, ordinary profit of ¥8,900 million and net profit of ¥6,100 million, with no revision from the latest forecasts in the earnings summary. In the next results, review not only whether the full-year forecasts are maintained, but also standalone Q2 revenue and operating profit, product sales, cost of sales and actual SG&A expenses. In particular, whether ordinary profit has accumulated to around ¥4,450 million and whether the operating margin recovers from 17.8% will help assess the reliability of the full-year plan.