Results against the post-upward-revision FY2027-H1 plan and the sustainability of exceeding the medium-term target

Consolidated FY2027-Q1 results were revenue of ¥14.263 billion, operating profit of ¥745 million, ordinary profit of ¥881 million and net income attributable to owners of the parent of ¥935 million. Year on year, revenue rose 5.8%, operating profit increased 44.4% and ordinary profit increased 59.9%, while net income declined 52.9%. At the end of the first quarter, revenue progress was approximately 22.8% against the initial full-year forecast of ¥62.5 billion, and operating profit progress was approximately 24.8% against the forecast of ¥3.0 billion, so results were not materially behind the initial plan.

The September revision to the earnings forecast subsequently raised the FY2027-H1 revenue forecast to ¥34.0 billion, the operating profit forecast to ¥2.6 billion, the ordinary profit forecast to ¥2.7 billion and the forecast for interim net income attributable to owners of the parent to ¥2.1 billion. The full-year forecasts were also revised to revenue of ¥65.7 billion, operating profit of ¥4.5 billion, ordinary profit of ¥4.6 billion and net income attributable to owners of the parent of ¥3.4 billion. The annual dividend forecast was increased from ¥64 to ¥110. Compared with the revised first-half forecasts, first-quarter results represented approximately 42.0% of forecast revenue, 28.7% of operating profit, 32.6% of ordinary profit and 44.5% of net income, meaning that a meaningful contribution from the second quarter is required.

The upward revision was attributed not only to a simple recovery in demand, but also to contributions from material-handling equipment sales that had been pushed back and large automated parking-system projects that were not included in the initial forecast. Accordingly, the key issue for FY2027-H1 is not simply an increase in orders, but whether projects progressed through completion and delivery and were actually reflected in revenue and operating profit. The first-quarter summary financial statements did not disclose order intake, order backlog, regional revenue or non-financial project volumes, leaving limited information with which to reproduce the basis for the upward revision externally.

The full-year operating profit forecast of ¥4.5 billion exceeds the ¥4.3 billion operating profit target set in the Medium-Term Management Plan 2027. However, this is only a revised forecast and does not mean that performance above the target has become established. In FY2027-H1, the focus will be on disclosure of project-level revenue recognition, segment profit contributions, amounts carried over to the second half and the order backlog supporting the full-year forecast. If first-half profit is concentrated in one-off recognition of large projects, the sustainability of the earnings level after achieving ¥4.5 billion for the full year and of the ¥110 dividend will require separate verification.