FY2027 1Q: profits are ahead of plan, with strong progress toward the full-year targets

In FY2027 1Q, revenue was ¥4,300.6 million, operating profit was ¥1,346.6 million, and profit for the quarter attributable to owners of the parent was ¥652.7 million. Compared with revenue of ¥3,178.7 million and operating profit of ¥867.8 million in the same period a year earlier, revenue increased 35.3% and operating profit increased 55.2%, with profit growth outpacing revenue growth. Operating margin rose by approximately 4.0 percentage points, from approximately 27.3% in the same period a year earlier to approximately 31.3% in the current period.

The full-year forecasts are revenue of ¥145 billion, operating profit of ¥36.5 billion, and profit attributable to owners of the parent of ¥17 billion. Progress as of 1Q was therefore 29.7%, 36.9% and 38.4%, respectively. Although quarterly seasonality needs to be taken into account, operating profit and net profit were clearly ahead of a simple one-quarter benchmark. The company has not revised its full-year forecasts as of the 1Q results, however, and the full-year operating profit forecast is only 1.1% above the previous fiscal year. It is therefore necessary to determine whether the high 1Q profit margin reflects temporary factors or a structural improvement that will continue through the second half.

In FY2027-H1, the first point to confirm will be whether revenue progress exceeds at least 29.7% and operating profit progress remains around 36.9%. The company has qualitatively attributed the 1Q performance to steady business development at each location, including the Chinese and Indian markets, but has not broken down profit contributions by price, volume, foreign exchange or product mix. In the first-half results, it will be important to obtain further details on which regional, product and cost factors behind the ¥1,346.6 million in operating profit were recurring.