The consolidation of Ijima Gold and Silver Industry has sharply expanded the revenue base, reducing comparability of performance

In FY2027-Q1, consolidated revenue was ¥11,815.153 million, operating profit was ¥1,098.441 million, ordinary profit was ¥1,094.520 million, and net income attributable to owners of the parent was ¥717.757 million. Revenue was approximately 11.6 times the ¥1,018.010 million reported in the same period last year, largely because the earnings of Ijima Gold and Silver Industry, which became a subsidiary in the previous consolidated fiscal year, were included in the consolidated income statement from the current period. It is therefore difficult to assess the growth rate of the existing businesses based solely on year-on-year comparisons.

By segment, the precious metals reuse, processing and refining business generated revenue of ¥10,462.976 million and segment profit of ¥724.612 million, accounting for approximately 88.6% of consolidated revenue. The performance-based advertising services business generated revenue of ¥709.625 million and profit of ¥704.208 million, while the used construction equipment marketplace-related business generated revenue of ¥510.549 million and profit of ¥65.273 million. The new precious metals business has significantly increased the revenue base, while the existing businesses remain sources of profit, which is important.

However, the consolidated operating margin was approximately 9.3%, down sharply from approximately 44.8% in the same period last year. Although the precious metals business generated substantial revenue, its segment margin was only approximately 6.9%, reflecting a different earnings structure from the former performance-based advertising services business. In addition, the simple total of segment profit was ¥1,561.264 million, creating a difference of ¥462.823 million from consolidated operating profit of ¥1,098.441 million. The next materials should be reviewed to determine how clearly corporate expenses, intersegment transactions and other adjustments are disclosed.

In FY2026, a ¥2,078.755 million gain on negative goodwill arising from the acquisition of Ijima Gold and Silver Industry was recorded as a special gain, increasing net income attributable to owners of the parent to ¥2,570.338 million, while operating profit declined year on year to ¥1,051.249 million. In FY2027-Q1, special gains were limited to a ¥1.482 million gain on the sale of investment securities. The focus next time will be how much operating profit the precious metals business can generate through sourcing, processing and refining, and inventory management, without relying on one-off acquisition accounting effects.