Operating profit ahead of plan in Q1, but full-year guidance unchanged

Revenue in Q1 of the fiscal year ending February 2027 was ¥38,115 million and operating profit was ¥5,681 million. This represents increases of 21.8% and 65.3%, respectively, from revenue of ¥31,296 million and operating profit of ¥3,438 million in the same period of the previous year. The operating margin rose from approximately 11.0% to approximately 14.9%, confirming profit growth well ahead of revenue growth.

Full-year guidance remains unchanged at revenue of ¥148,500 million and operating profit of ¥17,000 million. Q1 progress against full-year guidance was 25.7% for revenue and 33.4% for operating profit, putting operating profit progress 7.7 percentage points ahead of revenue. Operating profit for the fiscal year ended February 2026 was ¥16,246 million, with an operating margin of 11.6%. Accordingly, the operating profit forecast for the fiscal year ending February 2027 represents a 4.6% year-on-year increase, while the forecast operating margin is only approximately 11.4%. The 14.9% Q1 margin should not be viewed as an assumption for the full year.

The Q1 improvement was driven mainly by the marine business, which generated revenue of ¥32,564 million and segment profit of ¥5,736 million, and the industrial business, which generated revenue of ¥4,637 million and profit of ¥264 million. By contrast, the wireless LAN and handheld terminal business recorded a loss of ¥88 million on revenue of ¥839 million, while other businesses also recorded a loss of ¥20 million. The company attributed the results to higher sales for new vessels built in China, replacement and maintenance services for existing vessels, ETC in-vehicle units, defense equipment, and increased projects for the education market. It did not disclose a quantitative breakdown of how many millions of yen each factor contributed to operating profit.

In FY2027-H1, cumulative revenue and operating profit, as well as how the operating margin has moved from the Q1 level of 14.9%, should be monitored. The company had not disclosed first-half guidance as of Q1, so the simple 50% benchmarks of revenue of ¥74,250 million and operating profit of ¥8,500 million are analytical reference points only. Given the cited risks from the situation in the Middle East, China's export restrictions, and tight supply and demand for components, particularly semiconductor memory, it will be necessary to monitor whether full-year guidance is revised in H1 and whether the high margin proves temporary.