Will the strong first-quarter progress in FY2027 lead to delivery of the first-half and full-year targets?

Revenue in the first quarter of FY2027 was ¥2,110 million, up 29.6% from ¥1,627 million in the same period of the previous year. Operating profit was ¥68 million, up 160.4% from ¥26 million, while ordinary profit was ¥64 million and net profit was ¥39 million. Operating profit grew substantially faster than revenue, indicating operating leverage from the combination of volume, pricing and costs.

The full-year forecasts remain unchanged at revenue of ¥7,300 million, operating profit of ¥140 million, ordinary profit of ¥120 million and net profit of ¥80 million. In the first quarter alone, revenue reached 28.9% of the full-year forecast, operating profit 48.6%, ordinary profit 53.3% and net profit 48.8%. Against the 25% benchmark implied by a simple quarterly allocation, profit is clearly ahead of revenue. The first-half results will therefore need to establish whether this lead in profit continues or whether costs and demand are concentrated in the second half due to seasonality.

By revenue category, product and merchandise sales were ¥1,758 million, up 30.4% year on year, while scrap sales were ¥351 million, up 26.0%. However, the first-quarter disclosure does not break down product and merchandise sales into individual amounts for LPG cylinder valves, equipment valves, automotive applications, marine applications and other categories. Because the figures include the effects of scrap prices and factory utilization, it is not yet possible to determine how much of the ¥2,110 million in revenue was attributable to product volume and pricing.

The first-quarter summary also does not disclose revenue or profit by segment, order intake or order backlog, or a statement of cash flows. Accordingly, FY2027-H1 will need to test the sustainability of the ¥68 million in operating profit alongside product-level revenue, scrap sales, the operating margin, and changes in inventory and receivables. If the full-year forecast is not revised, the amount of revenue and profit the company assumes will be required in the second half should also be reviewed.