Plant restructuring has reduced the revenue base; loss improvement is now being tested for sustainability

Revenue in the first quarter of the fiscal year ending March 2027 was ¥23.922 billion, down approximately ¥8.5 billion, or 26.2%, from approximately ¥32.4 billion in the year-earlier period. The operating loss was ¥1.214 billion, the ordinary loss was ¥3.318 billion, and the net loss for the quarter was ¥3.454 billion. However, an operating loss of approximately ¥9.2 billion was recorded in the year-earlier period, so the operating loss has narrowed substantially despite the significant contraction in the revenue base.

By revenue category, automotive revenue was ¥19.2 billion, down ¥7.0 billion year on year, while consumer and industrial equipment revenue was ¥4.8 billion, down ¥1.5 billion. The total differs slightly from company-wide revenue because of rounding, but automotive accounted for approximately 80% of the revenue mix. This means that the end of automotive production, the withdrawal from low-margin products and changes to customer plans have a direct impact on the company-wide top line. Revenue in the first half of the fiscal year ended March 2026 was ¥66.43 billion, so in the next first-half cumulative results, it will be important to see where company-wide revenue bottoms out even if automotive revenue does not recover.

The year-on-year factors affecting operating profit were a positive ¥10.1 billion from foreign exchange, a negative ¥2.8 billion from lower volume, a positive ¥0.5 billion from product mix, a positive ¥3.2 billion from fixed-cost reductions and a negative ¥3.0 billion from other factors. In other words, the narrower operating loss was supported mainly by foreign exchange and fixed-cost reductions, rather than by higher volumes or improved selling prices. The key distinction between a one-off restructuring benefit and a structural improvement in profitability will be whether the company can absorb lower volumes after the benefits of yen depreciation and reduced plant expenses have run their course.

In the next FY2027-H1 results, revenue, the breakdown of automotive and consumer and industrial equipment revenue, the operating loss and EBITDA should be compared with the year-earlier period. In particular, the company currently does not disclose segment profit, product-level pricing and volumes, or capacity utilization. The focus will therefore be on whether the benefit equivalent to ¥3.2 billion in fixed-cost reductions continues into the first half, or is offset by a higher fixed-cost ratio as the revenue base contracts.