How much of the weak Q1 performance can be recovered in H1

Revenue for Q1 of the fiscal year ending March 2027 was ¥1,389 million, up only 1.0% from ¥1,374 million in the same quarter of the previous year. With the full-year revenue forecast at ¥10,960 million, progress at the quarterly stage was approximately 12.7%. If revenue were distributed evenly across the quarters, 25% would be one benchmark, but the disclosures provide limited information for determining whether the company’s revenue recognition is seasonal. It is therefore not possible to conclude from the 12.7% figure alone that the full-year target will be missed.

Operating loss, meanwhile, was ¥307 million, against a full-year forecast of ¥700 million in operating profit. Starting from the Q1 results, the company needs to recognize approximately ¥9,571 million in revenue and ¥1,008 million in operating profit over the remaining 3 quarters to meet the full-year forecasts. This is merely a calculation of the remaining amounts and could be achievable if orders and acceptance are weighted toward the second half, but the extent to which both revenue and profit have progressed by H1 will be the first test of the full-year forecasts.

If the full-year plan is simply allocated between the two halves, H1 revenue of ¥5,480 million and H1 operating profit of ¥350 million would serve as reference levels. Working back from the Q1 results, this would require approximately ¥4,091 million in revenue and ¥658 million in operating profit in Q2 alone. These are mechanical budgeting benchmarks, not quarterly targets provided by the company, so the actual assessment will also need to consider the timing of acceptance for Q2 orders and the timing of revenue recognition under maintenance contracts.

The previous year’s H1 results were revenue of ¥2,643 million and an operating loss of ¥222 million. Accordingly, in this year’s H1, it will be important to assess not only how much revenue increased year on year, but also how far operating profit improved from the operating loss recorded in the previous year. In the H1 earnings release, we will look for disclosure of cumulative revenue, cumulative operating profit, and whether the full-year forecasts have been revised, as well as explanations of planned revenue recognition over the remaining period and the timing of acceptance for major projects.