Can the company build on its return to profitability in 1Q through H1 and reach its ¥20.0 billion operating profit target?

In the fiscal year ended March 2026, revenue was ¥569.265 billion and operating profit was ¥14.336 billion, down 29.2% year on year. Net income attributable to owners of the parent was also a loss of ¥2.285 billion. For the fiscal year ending March 2027, the company initially forecast revenue of ¥590.0 billion and operating profit of ¥20.0 billion. In the 1Q earnings presentation, only the revenue forecast was raised, to ¥610.0 billion, while the operating profit forecast was left unchanged at ¥20.0 billion.

FY2027 1Q revenue was ¥148.9 billion, operating profit was ¥4.4 billion, ordinary profit was ¥4.3 billion and net profit was ¥2.0 billion. Operating profit was a loss in the year-earlier quarter, so profitability improved clearly. However, as of 1Q the company had not disclosed progress against its full-year forecasts or provided its own assessment of whether results were ahead of plan.

On a simple calculation, 1Q operating profit of ¥4.4 billion represents approximately 22% of the ¥20.0 billion full-year forecast, while 1Q revenue of ¥148.9 billion represents approximately 24% of the revised ¥610.0 billion revenue forecast. The company will need to generate ¥15.6 billion of operating profit from 2Q onward to meet its operating profit plan, and ¥461.1 billion of revenue to meet its revenue plan. For profit, approximately 78% of the full-year target must be generated in the remaining 3 quarters, so the return to profitability in 1Q alone is not enough to determine whether the plan will be achieved.

In the H1 results, it will be important to see whether the company separately discloses 2Q revenue and operating profit, or provides cumulative H1 progress against the full-year plan. In particular, we will assess, alongside any maintenance or revision of the ¥20.0 billion operating profit plan, whether the benefits from price revisions, production-site optimization and tariff-related improvements seen in 1Q continued into 2Q or were temporary factors concentrated in 1Q.