Revenue rose sharply, but the full-year plan requires acceleration from H1

Consolidated revenue in Q1 was ¥590 million, up 52.0% from approximately ¥389 million in the same quarter of the previous year. The company attributed the increase to orders for large molding machines, the scheduled recognition of revenue from molding machines and equipment, and higher maintenance and overhaul revenue from existing customers. However, with full-year revenue forecast at ¥2,900 million, Q1 progress was approximately 20.3%, about 4.7 percentage points below the simple 25.0% pace implied after three months.

Under a simple calculation that phases the full-year forecast evenly by quarter, revenue of ¥1,450 million would be required in H1. With Q1 actual revenue at ¥590 million, approximately ¥860 million would need to be recognized in Q2 alone, an increase of approximately 46% from Q1. This is not the company’s H1 forecast, but a benchmark for measuring progress against the full-year plan. If H1 revenue falls short of ¥1,450 million, achieving the full-year target would require revenue of ¥2,310 million, or an average of ¥770 million, over the three quarters of the second half.

Q1 revenue comprised ¥414.820 million from the plastic molding machine business and ¥176.019 million from the IT and staffing business. The molding machine business accounted for approximately 70.2% of total revenue and the IT and staffing business approximately 29.8%. Accordingly, assessing whether the 52.0% overall increase will continue beyond Q2 requires separate confirmation of not only the timing of revenue recognition from large molding machine and equipment projects, but also whether higher maintenance revenue and growth in the IT and staffing business will continue.

The Q1 explanation indicated that large orders had been secured, but did not disclose the amounts of orders received or the order backlog. At the next results announcement, it will be necessary to confirm whether revenue from the large projects secured in Q1 progressed into Q2, whether the order backlog is large enough to support the remaining ¥2,310 million of full-year revenue, and whether the increase in maintenance and overhaul revenue is temporary.