Q1 operating profit rose, but the focus is on reconfirming progress toward the full-year plan at the interim stage

Cumulative FY2027-Q1 revenue was ¥47.136 billion, up 7.5% year on year, operating profit was ¥2.061 billion, up 33.8%, and ordinary profit was ¥3.122 billion, up 25.8%. The operating margin was not disclosed directly in the materials, but calculated from revenue and operating profit it was approximately 4.4%, improving from approximately 3.5% in the same period of the previous year. Meanwhile, quarterly net income attributable to owners of the parent was only ¥1.167 billion, down 19.6% year on year.

The company's FY2027 full-year forecasts are revenue of ¥194.1 billion, operating profit of ¥11.2 billion, ordinary profit of ¥15.9 billion and net income attributable to owners of the parent of ¥8.7 billion. No changes were made to the earnings forecasts as of the end of Q1. Progress against the full-year forecasts was 24.3% for revenue, 18.4% for operating profit, 19.6% for ordinary profit and 13.4% for net income. If 50% of full-year earnings were generated in the first half, the corresponding benchmarks would be ¥97.05 billion, ¥5.60 billion, ¥7.95 billion and ¥4.35 billion, respectively. However, because seasonality has not been disclosed in sufficient detail, these should be treated as mechanical reference lines.

The weakness in net income was attributable not to deterioration in the core business but to extraordinary losses, including impairment losses on investment securities and losses on liquidation of subsidiaries. Q1 extraordinary losses totaled ¥507 million, comprising impairment losses on investment securities of ¥221 million, losses on liquidation of subsidiaries of ¥268 million and losses on disposal of fixed assets of ¥16 million. Because the company has not provided a breakdown of the factors behind changes in net income attributable to owners of the parent comparable to that for operating or ordinary profit, FY2027-H1 should be monitored for any recurrence of extraordinary losses and their impact on final profit, including taxes and profit attributable to non-controlling interests.

There are also disclosure limitations. The earnings table in the supplementary results materials presents cumulative figures, and does not show revenue or profit for the three months from April to June 2026 alone. In addition, the company did not prepare a cash flow statement for Q1, so operating, investing and financing cash flow and cash at the end of the period cannot be confirmed. Accordingly, FY2027-H1 should be reviewed not only for cumulative results but also for standalone first-half profit and loss, cash flow and the reasons for maintaining the full-year forecasts.