Q1 profit progress improved, but revenue is tracking slightly behind the full-year plan

FY2027-Q1 revenue was ¥4,513 million, down 1.5% year on year. Operating profit was ¥105 million, ordinary profit was ¥122 million, and profit attributable to owners of the parent was ¥182 million. Operating profit increased sharply from ¥20 million in the year-ago quarter. The fact that operating profit increased despite the lack of revenue growth indicates that cost reductions, sales spreads and improved order-unit pricing, rather than volume growth, drove the improvement in earnings.

The full-year plan calls for revenue of ¥21,000 million, operating profit of ¥550 million, ordinary profit of ¥600 million and profit attributable to owners of the parent of ¥300 million. No changes were made to the earnings forecast as of Q1. Revenue progress was 21.5% and operating profit progress was 19.1%, so both were below 25% relative to a simple one-quarter-of-the-year comparison. However, seasonality related to construction-project progress and the timing of project completion has not been disclosed, so the probability of achieving the full-year plan cannot be judged from Q1 progress alone. In FY2027-H1, the first points to check are whether revenue exceeds the year-ago ¥9,094 million and operating profit exceeds ¥104 million.

Profitability improved. Q1 operating margin was approximately 2.3%, up approximately 1.9 percentage points from approximately 0.5% in the year-ago quarter. FY2026 full-year operating margin was 1.2%, so the Q1 level is above the full-year result. However, achieving the full-year operating profit plan of ¥550 million requires adding ¥445 million over the remaining 9 months. A key issue for the next results is whether profit improvement will level off in H1 and whether margins can be maintained through the second half while absorbing persistently high material prices and increases in logistics and labor costs.

In terms of disclosure, no figures were provided for Q1 cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, or cash and cash equivalents at the end of the period. Sales volume, the impact of raw-material prices and the amount of improvement in sales spreads were also not disclosed by factor. Accordingly, in FY2027-H1 it will be necessary to check not only the year-on-year comparison of revenue above ¥9,094 million and operating profit above ¥104 million, but also whether the increase in operating profit is accompanied by cash generation and sustained gross-margin improvement.