FY2027 plan calls for a slight increase in revenue but lower operating profit, making Q1 profitability the focus.

FY2026 consolidated revenue was ¥29,254 million, operating profit was ¥1,561 million, ordinary profit was ¥2,265 million and net profit attributable to owners of the parent was ¥1,724 million. Revenue increased 23.1% year on year and operating profit increased 34.9%, improving the operating margin to 5.34%. By contrast, the company’s FY2027 forecasts are revenue of ¥30,000 million, operating profit of ¥1,450 million, ordinary profit of ¥2,000 million and net profit attributable to owners of the parent of ¥1,600 million. Revenue is expected to increase, but operating profit is forecast to be ¥111 million below FY2026 actuals.

Dividing the FY2027 forecasts evenly into four quarters gives an FY2027-Q1 reference level of ¥7,500 million in revenue and ¥362.5 million in operating profit. This one-quarter benchmark does not mean the company has promised even quarterly progress, but it is useful for measuring the start against the full-year plan at the next earnings release. FY2026-Q1 revenue was ¥7,076 million and operating profit was ¥388 million. Therefore, even if FY2027-Q1 revenue exceeds ¥7,500 million, operating profit below ¥362.5 million could indicate that revenue growth is accompanied by deteriorating profitability.

In particular, the decline in the operating margin from 5.34% in FY2026 to approximately 4.83% in the FY2027 plan indicates that revenue growth alone cannot explain profit growth. At the next earnings release, it will be necessary to assess whether the project mix for ships and land-based plants, price pass-through, raw material costs, personnel expenses and higher depreciation are pushing down the operating margin. The earnings summary currently available does not provide a detailed breakdown of cost of sales or gross profit, so it will also be important to see whether disclosures are provided that allow the change in gross margin to be verified directly.

In the nine months ended FY2026 Q3, revenue was ¥21,097 million and operating profit was ¥1,095 million, representing progress of approximately 99.6% against the full-year operating profit forecast of ¥1,100 million. FY2026 benefited from strong profit recognition in Q4, while the company’s FY2027 operating profit forecast is ¥1,450 million. In FY2027-Q1, in addition to the year-on-year change, we will want to confirm progress against the full-year forecast, project profitability and whether the company’s explanation of the margin has changed from its previous plan.