First-quarter progress against plan is solid, but the first-half pace will be confirmed in FY2027-H1

In the first quarter of the fiscal year ending March 2027, revenue was ¥3,861 million and operating profit was ¥580 million. With full-year forecasts of ¥15,575 million in revenue and ¥2,188 million in operating profit, progress rates were 24.8% for revenue and 26.5% for operating profit. Revenue was broadly equivalent to one-quarter of the full-year forecast, while operating profit was 1.7 percentage points ahead of revenue. At least as of the first quarter, it is difficult to say that profit growth got off to a weak start.

For the next cumulative second quarter, the mechanically calculated benchmarks are revenue of ¥7,787.5 million and operating profit of ¥1,094 million, representing half of the full-year forecasts. FY2026-H1 results were revenue of ¥7,464 million and operating profit of ¥1,043 million, so reaching these simple half-year benchmarks would require year-on-year increases of approximately 4.3% in revenue and 4.9% in operating profit. In the first quarter, revenue increased 3.1% year on year and operating profit increased 11.7%, meaning that additional growth in revenue will be needed in the second quarter.

As of the first quarter, the company had not revised its full-year forecasts and maintained its outlook of ¥15,575 million in revenue, ¥2,188 million in operating profit, ¥2,244 million in ordinary profit and ¥1,536 million in net income. The full-year forecasts imply year-on-year increases of 4.2% in revenue and 3.5% in operating profit, so the first-quarter 11.7% increase in operating profit is not simply incorporated into the full-year forecast. In the second quarter, it will be important to determine whether first-half results will exceed these conservative full-year assumptions, or whether the company is factoring in higher costs and fluctuations in resource prices in the second half.

The company did not prepare a quarterly consolidated cash flow statement for the first quarter, and did not disclose order intake, order backlog or quantified collection volumes. Accordingly, next time it will be important to examine not only profit progress rates, but also whether revenue growth came from collection volumes, unit prices or government contracts, and how much of the increase from operating profit of ¥580 million to cumulative first-half operating profit of ¥1,094 million can be explained.