Higher revenue and a narrower operating loss in Q1, but full-year operating profit remains dependent on the second half

FY2027-Q1 revenue was ¥8,954 million, up 13.7% from ¥7,873 million in the same period of the previous year. The operating loss narrowed from ¥215 million in the same period of the previous year to ¥15 million, while ordinary profit was ¥185 million and net profit attributable to owners of the parent was ¥183 million. Revenue growth and a narrower loss were confirmed, but the company had not yet reached operating profitability.

The full-year forecasts are revenue of ¥36,000 million, operating profit of ¥170 million, ordinary profit of ¥240 million and net profit attributable to owners of the parent of ¥150 million. The first-quarter financial results report contained no revisions to the forecasts. First-quarter revenue represented approximately 24.9% of the full-year forecast, broadly in line with the 25% benchmark based on four quarters, while operating profit was negative. The previous fiscal year recorded revenue of ¥34,414 million and operating profit of ¥470 million. Accordingly, the company is forecasting higher revenue this fiscal year but operating profit at a low level, down 63.9% year on year.

The company attributed the first-quarter operating loss partly to the early incurrence of construction costs associated with additional change orders. Bridge operations generated revenue of ¥3,186 million and segment profit of ¥385 million, while steel-frame operations generated revenue of ¥5,617 million and segment profit of ¥171 million. Although revenue recognition progressed in line with construction progress, the impact of costs incurred ahead of revenue recognition remained at the company-wide operating profit level. The first-quarter financial results report did not provide a numerical breakdown of the increase in costs by factor, the expected timing of revenue recognition under additional change orders or profitability by project.

For FY2027-H1, revenue of ¥18,000 million and operating profit of ¥85 million, equivalent to half of the full-year forecasts, will serve as mechanical benchmarks. However, simple comparisons have limitations because of seasonality in construction progress and the timing of revenue recognition for large projects. In addition to the amounts, it will be necessary to check whether operating profit has returned to positive territory, whether additional change orders have been reflected in revenue and profit, and whether the early incurrence of construction costs is continuing.