A strong start in Q1, but full-year earnings progress is lagging revenue

Revenue in Q1 of FY2027 was ¥80,594 million, up 11.6% year on year, while operating profit was ¥4,847 million, up 49.8%. Profit attributable to owners of the parent also rose 125.3% to ¥3,491 million. The fiscal year therefore began with profit growth outpacing revenue growth, compared with revenue of ¥72,198 million and operating profit of ¥3,235 million in the year-earlier quarter.

The full-year forecasts are revenue of ¥360,000 million, operating profit of ¥32,000 million and profit attributable to owners of the parent of ¥20,000 million. Dividing Q1 results by the full-year forecasts gives progress rates of approximately 22.4% for revenue, 15.1% for operating profit and 17.5% for net profit. Using one-quarter as a simple benchmark, revenue is broadly on track, while operating profit is lagging the passage of time. It will therefore be important to see whether margin improvement or earnings seasonality emerges in Q2.

The Q1 operating margin was approximately 6.0%, an improvement of approximately 1.5 percentage points from approximately 4.5% in the year-earlier quarter. However, the full-year plan assumes an operating margin of approximately 8.9%, requiring a further increase in profitability over the remaining 3 quarters to meet the annual target. The company cites increased sales of core products amid demand for labor saving and operational efficiency, higher revenue in overseas markets and improvement at Acrelec, but has not disclosed changes in cost of sales or selling, general and administrative expenses, or the contribution by volume and unit price.

For the next results for FY2027-H1, the focus will be on whether revenue approaches ¥180,000 million and operating profit ¥16,000 million, simple benchmarks for half-year progress. The Q1 supplementary materials do not provide the company’s own assessment of progress against the full-year forecasts or the likelihood of achieving its plans. In the H1 results, a key disclosure point will therefore be whether the company explains not only any maintenance or revision of its full-year forecasts, but also the revenue and operating profit levels required in H2. The scheduled earnings announcement date has been disclosed as 10 November 2026.