FY2027 full-year outlook points to a sales recovery, but most of the projected operating loss has already been incurred in Q1

FY2027-Q1 revenue was ¥2,844 million, up 22.2% from ¥2,328 million in the same quarter of the previous year. With the full-year revenue forecast at ¥11,500 million, Q1 progress was 24.7%, broadly in line with plan if each quarter is simply assumed to account for one-fourth of the full year. A recovery in demand for air-conditioning equipment, growth in automotive-related demand and a recovery in industrial equipment demand lifted revenue.

However, losses remain on the earnings side: an operating loss of ¥461 million, an ordinary loss of ¥447 million and a net loss attributable to owners of the parent of ¥429 million. Since the full-year operating loss forecast is ¥540 million, Q1 alone accounted for 85.4% of the projected full-year loss. On a simple earnings subtraction basis, the full-year forecast would be exceeded unless the operating loss for the remaining 3 quarters stays within a total of ¥79 million, but seasonality and product mix have not been disclosed, so this calculation cannot be treated as the earnings forecast as it stands.

Year on year, the operating loss narrowed from ¥539 million to ¥461 million, the ordinary loss from ¥517 million to ¥447 million, and the net loss from ¥489 million to ¥429 million. The operating margin also improved from approximately negative 23.2% in the same quarter of the previous year to approximately negative 16.2% in Q1. However, while the reduction in the loss has been confirmed, the company remains some distance from full-year profitability and a stable operating break-even position.

At the next H1 results, we will prioritize checking not only cumulative revenue but also how much the operating loss has narrowed from Q1's ¥461 million. In particular, whether the cumulative operating loss through Q2 remains within the full-year forecast of ¥540 million, and whether the factors behind changes in earnings, including raw-material costs, price revisions and production-line rebuilding costs, are disclosed quantitatively will be key to assessing the reliability of the full-year forecast.