Revenue growth continues, but the recovery in operating profit remains limited

FY2027-Q1 revenue was ¥58,250 million, up 12.9% from ¥51,605 million in the year-earlier quarter. Operating profit, however, fell 77.9% to ¥327 million from ¥1,480 million, and the operating margin declined approximately 2.3 percentage points from 2.9% to 0.6%. Growth in sales volume and orders did not translate into profit, with higher costs absorbing much of the benefit from higher revenue.

Compared with the full-year plan, Q1 revenue represented approximately 24.3% of the forecast, calculated as ¥58,250 million divided by ¥240,000 million, broadly in line with the elapsed portion of the fiscal year. Operating profit, however, represented only 3.4%, calculated as ¥327 million divided by ¥9,500 million. The company forecasts FY2027 revenue of ¥240,000 million and operating profit of ¥9,500 million, implying substantial profit accumulation in the remaining quarters, particularly in the second half.

For a medium-term comparison, FY2025 revenue was ¥221,644 million and operating profit was ¥15,615 million, compared with FY2026 revenue of ¥227,872 million and operating profit of ¥8,937 million. The FY2027 forecast calls for revenue to increase to ¥240,000 million, but operating profit of ¥9,500 million would remain approximately 39% below FY2025 actual results. The key question for FY2027-H1 is therefore not simply whether revenue continues to grow, but whether the sharp decline in profitability in FY2026 has bottomed out.

As a reference, allocating the full-year plan equally between the first and second half gives FY2027-H1 benchmarks of ¥120,000 million in revenue and ¥4,750 million in operating profit. After subtracting Q1 actual results, standalone Q2 would need to generate revenue of ¥61,750 million and operating profit of ¥4,423 million. These are mechanical benchmarks that do not reflect seasonality or constitute company guidance, but they provide a specific basis for measuring the extent of the profit recovery in Q2.