FY2027 1Q operating profit progress lagged revenue, requiring acceleration in H1

Revenue from April to June 2026 was ¥1,951 million, down 5.9% from ¥2,074 million in the same period a year earlier. Operating profit, however, was ¥165 million, up 13.5% year on year; ordinary profit was ¥176 million, up 15.4%; and net income attributable to owners of the parent was ¥183 million, up 81.5%. Although revenue declined, profit increased, indicating that 1Q performance was supported by profitability rather than volume growth.

Full-year forecasts are revenue of ¥9,500 million, operating profit of ¥980 million, ordinary profit of ¥1,000 million, and net income of ¥700 million. Progress in 1Q was 20.5% for revenue, 16.8% for operating profit, 17.6% for ordinary profit, and 26.1% for net income. Assuming a simple 25% quarterly progression, the H1 benchmarks would be revenue of ¥4,750 million and operating profit of ¥490 million, requiring an additional ¥2,799 million of revenue and ¥325 million of operating profit in 2Q alone. Since this calculation does not reflect the company's seasonality, the next results should distinguish between actual seasonality and the timing of project recognition.

First-quarter orders were ¥2,523 million, up 2.0% year on year, moving in the opposite direction from the decline in revenue. However, the order backlog has not been disclosed, so it is not possible to determine when orders will convert into revenue or how much they will support revenue from the latter half of H1 onward. The next results should provide the period between order growth and revenue conversion, the value of the order backlog, and project delivery schedules.

The full-year earnings forecast was unchanged as of 1Q. If cumulative H1 revenue or operating profit falls below ¥4,750 million or ¥490 million, respectively, the burden of revenue and profit required in the second half will increase, raising dependence on the full-year forecasts of ¥9,500 million and ¥980 million. Conversely, if 2Q operating profit reaches at least ¥325 million, H1 will approach the 50% plan line from the 1Q operating profit progress rate of 16.8%, providing an important basis for determining whether the improvement in profitability is temporary or sustainable.