FY2027-Q1 was in line with the full-year plan, but H1 will test the repeatability of high profitability

FY2027-Q1 revenue was ¥69,770 million, up 25.9% year on year, and operating profit was ¥7,590 million, up 137.1%. Revenue and operating profit improved sharply from ¥55,397 million and ¥3,201 million, respectively, in the prior-year quarter, while the operating margin rose approximately 5.1 percentage points, from approximately 5.8% to approximately 10.9%. Ordinary profit was ¥8,175 million and quarterly profit attributable to owners of the parent was ¥5,661 million, with all major profit items in the black.

The full-year forecasts are revenue of ¥276,000 million, operating profit of ¥27,600 million, ordinary profit of ¥28,400 million and net profit of ¥22,100 million. Q1 progress was 25.3% for revenue, 27.5% for operating profit and 25.6% for net profit, generally exceeding the simple 25% elapsed-quarter benchmark. As a mechanical guide that does not take seasonality into account, Q2 would need to generate revenue of ¥68,230 million and operating profit of ¥6,210 million to reach H1 revenue of ¥138,000 million and operating profit of ¥13,800 million. These are not company targets, but reference levels for measuring the pace at H1.

The company cited capital investment demand in Asia, particularly China, recovery in domestic Japanese demand related to semiconductor manufacturing equipment, and the foreign-exchange translation effect from yen depreciation as factors behind the improvement in Q1. However, there is no disclosure breaking down the increases in revenue and operating profit by amount into sales volume, selling prices, foreign exchange, raw-material costs and fixed costs. In H1, it will be necessary to confirm whether the operating margin of approximately 10.9% is maintained and how much of the increase in profit was contributed by higher demand and foreign-exchange translation, respectively.

In particular, it is important to determine whether the high Q1 margin resulted from certain large projects or shipment timing, or reflects the digestion of the order backlog and improved profitability. The remaining amount against the full-year operating profit forecast is ¥20,010 million. It will be important to confirm, together with the decision to maintain or revise the full-year forecast, what revenue and segment mix will be used to accumulate this profit from H1 onward.