FY2027: operating profit is expected to decline despite higher revenue; assess the sustainability of the profit recovery in FY2027-Q1

FY2026 revenue was ¥5,294.9 million, up 4.8% year on year, and operating profit was ¥371.5 million, turning positive from an operating loss of ¥47.3 million in the previous fiscal year. Ordinary profit was ¥392.4 million and net profit attributable to owners of the parent was ¥382.9 million, with the three key profit-and-loss items all turning positive. Results improved substantially from FY2025 revenue of ¥5,053 million and an operating loss of ¥47 million, but the company's FY2027 plan assumes revenue of ¥5,656 million, operating profit of ¥260 million, ordinary profit of ¥266 million and net profit of ¥215 million. This represents a 29.9% decline in operating profit and a 43.8% decline in net profit from the FY2026 actual results.

For FY2027-Q1, it is first necessary to establish a comparable base against the prior-year quarter. FY2026-Q1 revenue was ¥1,263 million, operating profit was ¥89 million, ordinary profit was ¥93 million and quarterly net profit was ¥103 million. Accordingly, in the next results we will assess not only whether revenue increases year on year, but also whether operating profit exceeds ¥89 million and the operating margin remains around the 7.0% recorded in the prior-year quarter. Quarterly targets cannot be mechanically back-calculated from the full-year plan, so it will be important to see whether the company explains progress toward the full-year targets of ¥5,656 million in revenue and ¥260 million in operating profit, as well as seasonality, at the Q1 stage.

The recovery in FY2026 operating profit was an improvement at the operating level, rather than the result of extraordinary gains or losses such as a ¥1.7 million gain on the sale of property, plant and equipment or a ¥10.1 million loss on the disposal of property, plant and equipment. There was also no impairment loss during the fiscal year. Accordingly, based on the information disclosed to date, the factors behind the lower FY2027 operating profit plan may include raw material prices, operating expenses, fuel and personnel costs in the transportation business, capital expenditure burdens, or a reversal of the factors that drove the FY2026 improvement, but no quantitative bridge by factor has been disclosed. In the next results, the focus will be on whether the assumption of operating profit of ¥260 million despite expected revenue growth can be tested using the breakdown of profit by segment, costs, depreciation and amortisation, and selling, general and administrative expenses.