First-quarter results were broadly in line with the first-half plan, but net profit progress was weak

First-quarter net sales for the fiscal year ending March 2027 were ¥3,524 million, representing progress of 25.5% against the full-year forecast of ¥13,800 million. Since the three months from April to June represent one-quarter of the full year, net sales were broadly progressing in line with the passage of time. Operating profit was ¥80 million, or 27.6% of the full-year forecast of ¥290 million, 2.1 percentage points ahead of net sales. As of the first quarter, it is difficult to conclude that net sales and operating profit were significantly behind the full-year plan.

The first-half cumulative forecasts are net sales of ¥7,000 million, operating profit of ¥140 million, ordinary profit of ¥170 million and net profit attributable to owners of the parent of ¥60 million. Simply deducting first-quarter results means that the second quarter would need to generate net sales of ¥3,476 million, operating profit of ¥60 million, ordinary profit of ¥58 million and net profit of ¥33 million. The required net sales amount is equivalent to 98.6% of first-quarter results, while the required operating profit is 75.0%. Required net profit, however, is above the first-quarter level of ¥27 million, making the company’s ability to build final profit toward the second half a point to monitor.

By profit line, ordinary profit of ¥112 million reached 35.0% of the full-year forecast of ¥320 million, while net profit of ¥27 million was only 20.8% of the full-year forecast of ¥130 million. The company recorded ¥47 million in special losses in the first quarter for measures related to defects in certain products, so the burden between operating profit and net profit may have been substantial. Whether similar costs will arise from the second quarter onward has not been disclosed at this stage.

The company attributes higher revenue and profit to strong industrial and medical equipment markets, expanded sales of industrial equipment and an improved sales mix. However, the company has a single reporting segment, and the contribution of industrial and medical equipment to sales and profit is not disclosed separately. At the next results announcement, in addition to confirming whether first-half results reached net sales of ¥7,000 million, operating profit of ¥140 million, ordinary profit of ¥170 million and net profit of ¥60 million, we will look for the factors behind any shortfall or achievement in net profit and whether quality-related costs recur.