Whether the recovery in orders translates into a recovery in revenue and profit is the focus for FY2027-H1

Consolidated revenue in FY2027-Q1 was ¥21.119 billion, down ¥9.858 billion, or 31.8%, from ¥30.977 billion in the prior-year quarter. Operating income swung from a profit of ¥922 million in the prior-year quarter to a loss of ¥652 million, while ordinary income also fell to a loss of ¥261 million. The company attributed this mainly to the contraction in revenue resulting from declining equipment demand in China for separator-film production for lithium-ion batteries. For FY2027-H1, ¥68.5 billion, equivalent to half of the simple full-year forecast, is one benchmark, and it will be necessary to assess whether revenue can recover from the ¥67.64 billion recorded in the prior-year first half.

By segment, molding-machine revenue was ¥13.789 billion, down 43.4% year on year, and the segment posted an operating loss of ¥932 million, making it the main driver of the company-wide revenue decline. Machine tools were relatively resilient, with revenue of ¥5.167 billion, up 16.5%, and operating profit of ¥356 million. Control machinery also posted revenue of ¥1.695 billion, up 9.1%, but recorded an operating loss of ¥127 million. First-half performance will therefore depend not only on whether machine tools remain strong, but also on how much the loss in molding machines, the largest segment, can be reduced.

Meanwhile, orders increased 35.6% year on year to ¥32.344 billion in FY2027-Q1, and the order backlog rose 5.4% to ¥107.865 billion. As orders and revenue are moving in opposite directions, the increase in orders may not be reflected immediately in first-half revenue. Capital-goods businesses also tend to have revenue and profit weighted toward the fiscal year-end. In FY2027-H1, we want to confirm which backlog projects will be recognized as revenue this fiscal year, their delivery schedules and product mix, particularly the proportion of China BSF-related projects.

At present, the amount of the decline in BSF, the contributions of sales volume and unit prices, regional molding-machine revenue and the segment breakdown of the order backlog have not been disclosed in sufficient detail. At the next earnings announcement, whether the year-on-year decline in molding-machine revenue narrows, whether machine-tool operating profit remains at ¥356 million and whether the control-machinery operating loss improves will provide concrete tests of whether the company has moved beyond a simple recovery in orders toward a recovery in profit.