Q1 was well ahead of plan, but the sustainability of large overseas orders is the focus for FY2027-H1

FY2027-Q1 consolidated revenue was ¥2,090 million, up 6.9% year on year, while operating profit was ¥342 million, up 49.1%. Ordinary profit was ¥346 million, up 51.4%, and quarterly net income attributable to owners of the parent was ¥230 million, up 64.7%, indicating that profit growth outpaced revenue growth. Operating profit increased by ¥113 million from ¥229 million in the year-earlier quarter, suggesting that the increase was driven not merely by higher revenue but potentially by an improved project mix and greater production efficiency.

The company’s FY2027 full-year forecasts are revenue of ¥6,805 million and operating profit of ¥687 million. The financial summary also provides a forecast for ordinary profit, while net income attributable to owners of the parent is forecast at ¥450 million. Q1 progress rates were 30.7% for revenue, 49.8% for operating profit and 51.1% for net income. On a simple calculation, the company needs to generate an additional ¥4,715 million in revenue, ¥345 million in operating profit and ¥220 million in net income from Q2 onward to meet its full-year forecasts. The remaining operating profit required is almost the same as the ¥342 million generated in Q1, making it important that margins do not fall sharply from the second half of the first half through the second half of the year.

The company attributes the profit increase to large overseas orders, particularly from existing customers in North America. Q1 segment revenue was ¥1,369.714 million for the plywood machinery business, ¥532.475 million for the woodworking machinery business and ¥188.193 million for the housing materials business. Growth in the plywood machinery business supported the increase in company-wide revenue. The woodworking machinery business recorded lower revenue but secured operating profit of ¥139.779 million, while the housing materials business posted an operating loss of ¥7.276 million. The repeatability of company-wide earnings therefore needs to be assessed by segment.

Q1 orders totaled ¥1,536.972 million, up 118.9% year on year, but the entire order intake is not recognized as revenue in the same quarter. Large machinery requires time to manufacture and install, and the business structure makes revenue recognition prone to concentration toward period-end. In FY2027-H1, we will examine the order backlog, progress from order receipt to revenue recognition, delivery schedules for North American projects and revenue by region to determine whether Q1’s high margins reflect one-off large projects or an ongoing improvement in profitability.