Full-year forecasts maintained; Q1 revenue led, requiring verification of operating profit progress

Revenue in FY2027-Q1 was ¥85,050 million, up 30.2% year on year, operating profit was ¥5,163 million, up 57.4%, and ordinary profit was ¥6,965 million, up 60.0%. The operating margin was approximately 6.1%, up approximately 1.0 percentage point from approximately 5.0% in the same period of the previous year. Revenue and operating profit increased simultaneously, indicating a strong Q1 start on the surface.

Progress against the full-year forecast was 24.3% for revenue, 20.2% for operating profit, 26.8% for ordinary profit and 19.8% for profit attributable to owners of the parent. Since 25% of the fiscal year had elapsed at the end of Q1, revenue was broadly in line with the plan, while operating profit and net profit were below a simple quarterly run rate. In FY2027-H1, it will be necessary to confirm whether cumulative operating profit rises to approximately ¥12,750 million and whether profitability improves in Q2 alone.

Profit attributable to owners of the parent was ¥4,356 million, down 3.1% year on year. Despite the increase in operating profit, final profit declined because a gain on the sale of investment securities recorded in the same period of the previous year did not recur and a business restructuring loss of ¥906 million was recorded. Accordingly, when assessing first-half net profit, it is necessary to distinguish changes in operating profit from whether extraordinary gains and losses, such as the business restructuring loss, recur in Q2.

As of Q1, the company had not revised its full-year forecasts and maintained revenue of ¥350,000 million, operating profit of ¥25,500 million, ordinary profit of ¥26,000 million and profit attributable to owners of the parent of ¥22,000 million. The operating profit forecast implies an 18.2% increase from actual operating profit of ¥21,578 million in the previous fiscal year, while the net profit forecast is 25.9% below the previous year’s ¥29,708 million, which included a gain on bargain purchase. At the next results announcement, it will be important to distinguish potential upside in operating profit from progress in underlying profit excluding extraordinary gains and losses.