The FY2027 plan has changed: revenue is expected to grow, but profit recovery will be delayed.

FY2026 actual revenue was ¥167.092 billion and operating profit was ¥3.739 billion, whereas the initial FY2027 forecast was revenue of ¥161.6 billion and operating profit of ¥1.4 billion. In FY2027-Q1, revenue was ¥42.419 billion and the operating loss was ¥463 million. Revenue reached approximately 26.3% of the initial full-year forecast, but profit was negative against a plan for positive operating profit. Progress in revenue alone is not sufficient to determine whether the company is returning to its full-year plan.

In the 29 September revision, the revenue forecast was raised by ¥19.2 billion to ¥180.8 billion, while the operating profit forecast was reduced by ¥1.1 billion, from ¥1.4 billion to ¥300 million. The operating margin therefore falls from approximately 2.2% to approximately 0.17% on a simple calculation. The upward revenue revision may include not only a recovery in volumes but also selling-price and translation effects from aluminum prices and foreign exchange, and does not indicate an improvement in profitability. In fact, the latest performance revision also increased the first-half ordinary loss forecast from ¥1.2 billion to ¥1.85 billion.

Simply linking the Q1 operating loss of ¥463 million with the revised full-year operating profit forecast of ¥300 million means that at least ¥763 million in operating profit will be required in aggregate from Q2 through Q4. If FY2027-H1 results are loss-making, the required recovery in the second half will be even greater. Accordingly, at the next results announcement, the focus should be less on changes in revenue and more on the extent to which the impact of higher aluminum prices has been reflected in selling prices, North American manufacturing costs have fallen, and the decline in orders from China in Asia has narrowed on a quarterly basis.

The earnings presentation materials assume exchange rates of ¥155 to the US dollar, ¥22 to the Chinese yuan and ¥1.70 to the rupee for the full-year plan. However, the assumed aluminum ingot price and the amount of profit uplift from passing through higher prices have not been disclosed. In FY2027-H1, the key points will be whether the revised revenue forecast of ¥180.8 billion and operating profit forecast of ¥300 million are maintained, whether the first-half ordinary loss remains within ¥1.85 billion, and whether another downward revision is made.