A recovery in the first half is needed to achieve ¥660 million in full-year operating profit

Consolidated revenue for the first quarter of the fiscal year ending March 2027 was ¥4,336 million, down 8.8% year on year, while operating profit was ¥106 million, down 75.3%. Ordinary profit was ¥153 million and net income attributable to owners of the parent was ¥76 million, indicating substantial declines in profit items below operating profit as well. The company attributed the results mainly to weak orders for injection-molding-related products, particularly from the automotive industry, higher raw-material prices, and a higher manufacturing fixed-cost ratio resulting from lower revenue.

The full-year forecasts are revenue of ¥19,500 million, operating profit of ¥660 million, ordinary profit of ¥600 million and net income of ¥380 million. As of the first quarter, the company had not revised its forecasts. Dividing first-quarter results by the full-year forecasts gives progress rates of approximately 22.2% for revenue and 16.1% for operating profit. Assuming a simple even quarterly progression, the benchmark is 25%. Operating profit was 8.9 percentage points below that benchmark, indicating that profit is ramping up more slowly than revenue.

Seasonality and delivery timing by project cannot be confirmed from the disclosed information. Accordingly, ¥9,750 million and ¥330 million are mechanical benchmarks based on 50% of the full-year forecasts, not the company’s own first-half plan. After deducting first-quarter results, standalone second-quarter revenue of ¥5,414 million and operating profit of ¥224 million will be required. In the next earnings release, it will be necessary to review standalone second-quarter revenue and operating profit in addition to six-month results, and determine whether the profit recovery reflects one-off project recognition or a sustained recovery in demand.

Results for the fiscal year ended March 2026 were revenue of ¥19,367 million and operating profit of ¥447 million. For the fiscal year ending March 2027, the company forecasts revenue growth of only 0.7% year on year, but operating profit growth of 47.3%. In other words, achieving the full-year plan requires a recovery in profitability, which deteriorated as revenue declined, rather than substantial revenue growth. If six-month operating profit falls short of ¥330 million, the concentration of required profit in the second half will increase. It will therefore be important to see whether the company provides specific explanations of its second-half order and gross-margin assumptions, in addition to maintaining the full-year forecast.