FY2027 1Q: substantial profit growth, but full-year sales progress is somewhat slow

Sales in FY2027 1Q were ¥1,808 million, up 16.6% year on year. Operating profit was ¥414 million, ordinary profit was ¥428 million, and net profit attributable to owners of the parent was ¥269 million, representing year-on-year increases of 136.3%, 111.3% and 105.2%, respectively. Profit growth substantially outpaced sales growth, with a recovery in profitability driving performance in the short term.

The company's forecasts for the fiscal year ending March 2027 are sales of ¥8,602 million, operating profit of ¥1,707 million, ordinary profit of ¥1,742 million and net profit attributable to owners of the parent of ¥1,219 million. Progress in 1Q was 21.0% for sales, calculated as ¥1,808 million ÷ ¥8,602 million, and 24.3% for operating profit, calculated as ¥414 million ÷ ¥1,707 million. Sales were approximately 4 percentage points below the 25% level implied by an even quarterly distribution. Operating profit, by contrast, was close to the simple 25% benchmark, meaning profit progress exceeded sales progress.

The simple H1 benchmark is sales of ¥4,301 million and operating profit of ¥853.5 million. These are not the company's H1 forecasts, but mechanical benchmarks calculated by halving the full-year forecasts, and may vary depending on seasonality and the delivery timing of large projects. They are nevertheless useful for assessing the extent of improvement from FY2026-H1, when sales were ¥3,504 million and operating profit was ¥579 million. In particular, it will be important to see whether the increase in 1Q sales continues into 2Q and whether sales of domestic projects and screw fastening equipment recover.

Since the company has maintained its full-year forecasts, FY2027-H1 should be assessed to determine whether the sales shortfall reflects a temporary issue with project recognition timing or a decline in the likelihood of achieving the full-year forecasts themselves. If H1 sales fall below ¥4,301 million, the sales volume required in the second half will increase. Conversely, if operating profit exceeds ¥853.5 million while the operating margin remains around 20%, there will be some headroom in the current profit forecasts.