Q1 revenue growth did not translate into profit growth; recovery in the operating margin to be assessed in the first half

Consolidated revenue in the first quarter was ¥4,317 million, up 16.0% from approximately ¥3,722 million in the year-earlier quarter. Operating profit, however, declined 0.2% to ¥647 million from approximately ¥649 million. Operating profit growth lagged well behind revenue growth, indicating that higher revenue did not translate directly into profit growth.

The operating margin fell by approximately 2.5 percentage points, from approximately 17.4% in the year-earlier quarter to approximately 15.0% in the current quarter. The operating margin for the full fiscal year ended March 2026 was 16.4%, so the latest first-quarter level was also below the full-year result. Ordinary profit increased 3.7% year on year to ¥677 million, while profit attributable to owners of the parent increased 1.9% to ¥481 million, but costs, product mix and foreign-exchange effects may have absorbed the revenue growth at the operating-profit level.

The company attributed the revenue increase to domestic sales in the Automotive segment and diaphragm-pump sales, primarily overseas, in the Industrial segment. However, it has not disclosed how many millions of yen of the 16.0% revenue growth came from sales volume, price revisions or foreign-exchange translation. The detailed changes in gross profit, SG&A expenses and foreign-exchange gains and losses also cannot be confirmed from the first-quarter information provided.

At the next, second-quarter results announcement, we will assess whether revenue growth remains in the double digits year on year and whether the first-half operating margin stays at or above 15.0%. We will also assess whether first-half operating profit turns positive year on year and approaches the 16.4% margin recorded for the full fiscal year ended March 2026, and whether the contributions of raw-material costs, personnel expenses, logistics costs and foreign exchange to the margin deterioration are disclosed quantitatively. These will help determine the reliability of the full-year forecast.