Turned profitable in Q1, but sustainability of the strong progress against the full-year forecast is the focus

The first quarter from April to June 2026 generated revenue of ¥7,227 million, up 19.4% from ¥6,051 million in the same period of the previous year. Operating income turned around from a loss of ¥421 million in the same period of the previous year to profit of ¥473 million, while the operating margin improved from approximately negative 7.0% to approximately 6.5%. Ordinary income was ¥740 million and net income attributable to owners of the parent was ¥559 million, with all major profit lines turning positive.

In contrast, the company's FY2027 full-year forecasts are revenue of ¥28,000 million, operating income of ¥200 million, ordinary income of ¥550 million and net income attributable to owners of the parent of ¥100 million. Q1 revenue progress was 25.8%, only slightly above the simple quarterly benchmark of 25%, while operating income reached 236.5% of the full-year forecast. Net income was also well above the full-year forecast at ¥559 million, suggesting that the assumptions may include a decline in profit in the second half, rather than simple seasonality alone.

Factors behind the Q1 earnings growth included a sharp recovery in demand for power supplies for semiconductor manufacturing equipment in the Electronics business, increased demand for marine and medical power supplies, contributions from large projects, and sales and orders brought forward in the Chemitronics business. Accordingly, demand declines and the drop-off of large projects need to be monitored before extrapolating Q1 operating income of ¥473 million to a full-year run rate. The company has itself left its full-year earnings forecasts unchanged and has not translated the strong current progress into an upward revision.

For FY2027-H1, the key points to monitor are whether cumulative operating income through Q2 reaches at least ¥200 million and whether revenue achieves the simple progress benchmark of around ¥14,000 million. In addition, orders received, order backlog, project-level profit contributions, the value of sales brought forward and revenue by region had not been disclosed as of Q1. Whether the company maintains its full-year forecasts or explains that Q1 profit was a one-off will be an important issue to verify in the next results announcement.