Sales growth continues, but operating profit recovery is the top checkpoint for FY2027-H1

FY2027-Q1 revenue was ¥27.559 billion, up ¥1.253 billion, or 4.8%, from ¥26.306 billion in the same period of the previous year. Operating profit, however, declined by approximately ¥579 million, from ¥602 million to ¥23 million, while the operating margin fell, on a calculated basis, from approximately 2.3% to approximately 0.1%. Ordinary profit also declined 21.2% year on year to ¥700 million, and net profit attributable to owners of the parent fell 33.2% to ¥408 million, showing a significant divergence between revenue growth and profit performance.

The company’s FY2027 full-year forecasts are revenue of ¥110 billion and operating profit of ¥3.3 billion. Q1 progress was approximately 25.1% for revenue and approximately 0.7% for operating profit. Revenue is progressing at nearly the same pace as the elapsed portion of the fiscal year, but operating profit is significantly behind. However, the company’s profit is affected by production fluctuations, the timing of price pass-through and the timing of fixed-cost investment recognition, so it is not possible to determine achievement of the full-year forecast based on Q1 alone. At the next interim results, the key question will be whether profit recovery is achieved in Q2 alone.

The comparable period, FY2026-H1, recorded revenue of ¥54.057 billion and operating profit of ¥1.495 billion, for an operating margin of approximately 2.8%. For FY2026 as a whole, operating profit was ¥2.847 billion and the operating margin was only 2.6%, down 35.0% from the previous year’s ¥4.384 billion. Whether the company can recover the previous year’s operating profit level in FY2027-H1 will provide a basis for judging its ability to absorb higher fixed costs and tariff and materials costs, rather than simply its ability to grow revenue.

FY2027-Q1 did not include a quarterly statement of cash flows, and operating cash flow was not disclosed. No figures were disclosed for orders received or the order backlog either. At the next results announcement, in addition to revenue and operating profit progress, we will check whether the company discloses first-half operating cash flow, the amount recovered through price pass-through and leading indicators for orders and production.