Checking FY2027-H1 progress toward ¥8.6 billion in full-year operating profit after the upward revision

For the first quarter of the fiscal year ending March 2027, consolidated revenue was ¥26.292 billion, operating profit was ¥2.869 billion, ordinary profit was ¥2.855 billion, and profit attributable to owners of the parent was ¥2.040 billion. Revenue fell 16.1% year on year and operating profit declined 3.4%, resulting in lower revenue and profit on a consolidated basis. However, first-quarter operating profit had reached 46.3% of the original full-year forecast of ¥6.2 billion.

The full-year forecast was subsequently revised on 11 September. Revenue was raised from ¥110.0 billion to ¥111.0 billion, operating profit from ¥6.2 billion to ¥8.6 billion, ordinary profit from ¥6.2 billion to ¥8.5 billion, and net profit from ¥4.5 billion to ¥6.2 billion. For operating profit, the denominator for the full-year target changed from ¥6.2 billion to ¥8.6 billion, bringing first-quarter progress to approximately 33.4% on the revised basis. This does not mean that actual performance deteriorated; it indicates that the profit level required for the remainder of the year has risen because the forecast was increased.

For the next reporting period, FY2027-H1, first-half revenue, operating profit, ordinary profit and net profit should be compared on the same basis with the first-half forecast announced after the first quarter. For first-half operating profit, ¥4.3 billion, or half of the annual ¥8.6 billion target, will serve as a mechanical benchmark, while we will check whether the company explains actual seasonality or any concentration of earnings in the second half. Even if profit falls below ¥4.3 billion, it will be important to see whether the company provides the profit required in the second half and the basis for achieving it.

The reasons for raising the full-year forecast span several factors, including pricing, cost reductions, foreign exchange and the fading impact of the end of the Airdog contract. Accordingly, at the next results announcement we need to check not only whether the full-year forecast is maintained, but also whether it is revised again based on first-half results, the assumed exchange rate, assumptions for key component prices and the amount of operating profit remaining for the second half. In particular, if the ¥8.6 billion operating profit forecast is maintained, the key issue in assessing the sustainability of the upward revision will be how much profit is planned to be generated by the end of the first half and how many billions of yen are expected to be added in the second half.