Protecting profit through price revisions and cost reductions despite lower revenue, but interim-period progress needs to be monitored

FY2027-Q1 revenue was ¥5,293 million, down 1.0% year on year, while operating profit increased 12.6% to ¥90 million and ordinary profit increased 29.4% to ¥121 million. Net profit attributable to owners of the parent was ¥45 million, down only 0.2% year on year, indicating a combination of improving operating profitability despite a softer top line.

The full-year forecasts are revenue of ¥23,500 million, operating profit of ¥850 million, ordinary profit of ¥870 million and net profit attributable to owners of the parent of ¥560 million. Q1 progress was approximately 22.5% for revenue and approximately 10.6% for operating profit, meaning profit progress is lagging revenue progress. As the company has not disclosed any quarterly concentration of profit or the timing of expenses, there is insufficient basis to conclude from the Q1 figures alone that the full-year target will be missed. However, it will be necessary to monitor how much operating profit accumulates in FY2027-H1.

The comparable FY2026-H1 results were revenue of ¥11,144 million and operating profit of ¥280 million. In the next earnings release, it will be important to confirm not only whether revenue exceeds the year-earlier level, but also which areas, including the domestic residential market, overseas sales, the non-residential sector and new applications, drove the interim-period change. The current Q1 disclosure explains that price revisions and cost reductions contributed, but does not provide a breakdown of the contribution amount or unit price and volume.

In FY2026, the company secured operating profit of ¥955 million on revenue of ¥23,253 million, but is forecasting lower operating profit of ¥850 million for FY2027. Accordingly, in FY2027-H1 it will be important to assess, based on segment profit, gross margin and year-on-year changes in selling, general and administrative expenses, whether the margin improvement seen in Q1 was due to a temporary decline in SG&A expenses or is reproducible through improved gross margins and fixed-cost absorption.