Will Q1’s strong start continue through FY2027-H1?

FY2027-Q1 revenue was ¥37,665 million, operating profit was ¥2,872 million, ordinary profit was ¥3,127 million, and net income attributable to owners of the parent was ¥2,397 million. Year on year, revenue increased 24.4%, operating profit 44.8%, ordinary profit 55.1%, and net income 50.5%. The operating margin also improved by approximately 1.1 percentage points, to about 7.6% from approximately 6.6% a year earlier. The fact that operating profit grew faster than revenue provides a basis for assessing whether the improvement reflects more than a simple recovery in volumes, including a better product mix and fixed-cost absorption.

The full-year forecasts are revenue of ¥143,000 million, operating profit of ¥10,000 million, and net income attributable to owners of the parent of ¥6,700 million. At the end of Q1, progress was 26.3% for revenue and 28.7% for operating profit. If quarterly progress is simply assumed to be 25%, both revenue and operating profit are slightly ahead of plan. However, if FY2027-H1 revenue does not reach ¥71,500 million and operating profit does not reach ¥5,000 million, the plan’s concentration in the second half will again become apparent. At the next results announcement, the key points will be Q2 standalone revenue and operating profit, as well as how the company assesses progress for the first half as a whole.

The full-year net income forecast is ¥6,700 million, down 18.9% from the previous fiscal year’s ¥8,260 million. In FY2026, the company recorded a ¥2,857 million gain on the sale of an investment in an affiliated company as extraordinary income. As a result, net income is expected to fall below the previous year even though operating profit is increasing. Q1 net income was ¥2,397 million, or 35.8% of the full-year forecast, but this includes the effects of non-operating income and expenses and extraordinary income and expenses. At the first-half results, it will be necessary to assess progress in pretax profit and net income without relying on one-off gains.

The company cited recoveries in primary batteries, adhesive tape, automotive optical components, and semiconductor-related products, customer demand to rebuild inventories, and the weaker yen as factors behind Q1’s revenue growth. At the same time, higher raw-material, electricity, and transportation costs, supply shortages, customer production adjustments, and market stagnation remain risks for subsequent periods. At the next results announcement, the most important point will be whether the company maintains its full-year forecasts of ¥143,000 million in revenue and ¥10,000 million in operating profit, or revises them based on cumulative Q2 results and the order environment in the second half.