H1 ordinary profit forecast revised down; net income forecast revised up on lower tax burden

In the 16 October revision, the FY2027-H1 ordinary profit forecast was cut by ¥3 million, or approximately 1.8%, from ¥168 million to ¥165 million. Meanwhile, the H1 net income forecast was reportedly revised up to ¥134 million, indicating that the direction of the revision differs at the profit level after including non-operating gains and losses and taxes. At the next results announcement, we would like to see actual sales, operating profit, ordinary profit, and net income reported separately in monetary terms, and confirm whether the downward revision to ordinary profit arose from sales, gross profit, or fixed costs.

The main reason given for the upward revision to net income is that the tax burden was lower than initially expected. Accordingly, the breakdown of pretax profit, income taxes, and the effective tax rate will be important, in addition to whether H1 net income lands at ¥134 million. Q1 sales were ¥1,297 million, operating profit was ¥15 million, ordinary profit was ¥35 million, and net income was ¥32 million. This means that ¥102 million would need to be generated in Q2 alone to achieve the H1 net income forecast of ¥134 million. It will be necessary to confirm whether this is accompanied by an improvement in operating profit, rather than reflecting only a temporary reduction in the tax burden.

The full-year ordinary profit forecast of ¥378 million is only 0.5% above actual ordinary profit of ¥376 million in the fiscal year ended March 2026. Based on the H1 forecast of ¥165 million, achieving the full-year plan requires ¥213 million in H2, or 56.3% of the full-year plan. Q1 ordinary profit was ¥35 million, representing progress of 9.3% against the full-year plan. Even if H1 results land around ¥165 million, the plan therefore assumes that H2 will contribute more profit than H1. As seasonality and delivery timing have not been disclosed, this should not be judged on a simple half-year split; it should be assessed together with the H2 order and production plans.

At the end of Q1, the full-year forecasts were sales of ¥7,000 million, operating profit of ¥346 million, ordinary profit of ¥378 million, net income of ¥248 million, and an annual dividend of ¥10. Although the upward revision to H1 net income and the lower tax burden have been reported, other reports state that the full-year forecast is still under review, leaving room to confirm the treatment of full-year net income. At the next results announcement, we will confirm together whether the full-year sales, operating profit, ordinary profit, and net income forecasts remain unchanged or have been revised, whether any increase in net income is limited to the tax effect, and whether the assumptions underlying the ¥10 annual dividend have changed.