The first quarter was in line with the full-year plan, but the sustainability of profit growth will be assessed in the second quarter

For the first quarter of the fiscal year ending March 2027, revenue was ¥206,550 million, up 10.7% year on year, and operating profit was ¥30,565 million, up 17.2%. The operating margin was 14.8%, approximately 0.8 points higher than approximately 14.0% in the same quarter of the previous year. The full-year forecasts are revenue of ¥820,000 million and operating profit of ¥110,000 million. First-quarter progress was approximately 25.2% and 27.8%, respectively, so results were not substantially behind the elapsed portion of the fiscal year.

However, it is too early to judge full-year achievement based solely on the progress rate. In the previous fiscal year's interim period, revenue was ¥378,421 million, operating profit was ¥51,495 million and the operating margin was 13.6%. These figures will serve as the basis for the year-on-year comparison at the next interim results. Revenue of ¥410,000 million and operating profit of ¥55,000 million, equivalent to 50% of the full-year plan, are merely mechanical benchmarks and are not the company's seasonally adjusted plan, but they are useful practical thresholds for measuring progress against the first-half plan.

Factors behind first-quarter profit growth included the boost to revenue from yen depreciation and local-currency appreciation, as well as an improvement in the cost ratio from a US tariff refund. Current disclosures do not provide separate monetary details of the tariff refund, the improvement in the cost ratio excluding the refund or the impact of foreign exchange on revenue and operating profit. It is therefore impossible to determine from the published figures alone how much of the 14.8% first-quarter operating margin resulted from continuing improvements such as price revisions and cost reductions, and how much resulted from a temporary refund and foreign-exchange movements.

At the next earnings release, it will be necessary to check not only the absolute levels of interim revenue and operating profit but also the operating margin, the one-off nature of the tariff refund and underlying growth excluding foreign-exchange effects. If the company secures operating profit of ¥55,000 million in the interim period while maintaining the ¥110,000 million full-year forecast, this would support achievement of the FY2027 plan. If the margin falls below 13.6% in the previous year's interim period and the loss of the refund benefit cannot be offset by cost reductions, the assumptions behind the full-year plan will need to be reassessed.