Has the delay in large projects turned into a sharp recovery in H1?

Consolidated revenue in Q1 of FY2027 was ¥446.018 million, down 28.3% from ¥622.311 million in the same quarter of the previous year. The operating loss was ¥107.982 million, a deterioration of ¥85.351 million from the ¥22.631 million loss in the same quarter of the previous year. Ordinary loss was ¥111.344 million, and the quarterly net loss attributable to owners of the parent was ¥115.398 million, indicating that the decline in revenue flowed through from operating profit to bottom-line earnings.

The company attributed the decline in revenue to the rollout of a large project for a major customer being pushed back to Q2. It also indicated that the value of large-format signage rollouts in Q2 is expected to be approximately four times the Q1 level. However, this is a forecast for rollout value, and the amount of revenue actually recognized, gross profit and order backlog for the project have not been disclosed. In the H1 results, it will be necessary to determine, based on revenue, segment profit and loss, and the number or absolute value of projects, whether the project was merely shifted to a different recognition period or part of the rollout was delayed further.

The full-year revenue forecast is ¥2,910 million, putting progress at 15.3% based simply on Q1 results. Since seasonality and the timing concentration of project recognition have not been disclosed, ¥1,455 million, equivalent to 50% of the full-year forecast, cannot be treated as the formal H1 target, although it serves as a mechanical progress benchmark. Reaching this level from the Q1 result would require revenue of approximately ¥1,009 million in Q2 alone, making it important to assess how much the expected approximately fourfold increase in large projects contributed to total consolidated revenue.

Revenue in the previous fiscal year was ¥2,460.693 million, and the operating loss was ¥83.000 million. The current forecast calls for revenue to increase 18.3% and operating profit to turn positive at ¥30 million, requiring an improvement of ¥113 million at the operating profit level. In H1, the focus will be not only on whether the full-year forecast was revised, but also on whether the increase in revenue from project recognition translated into improved operating profit, or whether the company remained loss-making because of the project mix or fixed-cost burden.