First-quarter operating profitability is ahead of the full-year plan, but sustainability through the first half is the key focus

First-quarter FY2027/3 revenue was ¥135.739 billion, up 16.8% from ¥116.205 billion in the same period of the previous year. Operating profit rose from ¥195 million to ¥9.635 billion, while the operating margin increased from approximately 0.2% to approximately 7.1%. Ordinary profit was ¥11.243 billion, and profit attributable to owners of the parent was ¥9.006 billion, representing year-on-year increases of 352.6% and 203.6%, respectively.

Mechanical progress against the full-year plan was 26.6% for revenue, calculated as ¥135.739 billion ÷ ¥510 billion, and 32.1% for operating profit, calculated as ¥9.635 billion ÷ ¥30 billion. Compared with the 25% elapsed-period benchmark for the first quarter, revenue was broadly on plan, while operating profit was ahead. However, profitability varies significantly between segments in the semiconductor business, so the second quarter will need to confirm whether this profit progress can be maintained through the first half.

The company cited revenue growth in the industrial equipment and computer and storage markets, in addition to the automotive market, as drivers of the increase. It explained that the rise in operating profit reflected not only higher revenue but also lower depreciation expense following impairment charges in the previous fiscal year. However, the latest quarterly report does not disclose the contribution of individual factors such as sales volume, pricing, material costs, inventories and foreign exchange, making it impossible to fully distinguish the contributions of stronger demand and changes in the cost structure to the improvement in profit.

In the next first-half FY2027/3 results, the first points to confirm will be whether revenue reaches ¥255 billion, equivalent to 50% of the full-year plan, and whether operating profit reaches ¥15 billion. A simple calculation based on first-quarter results indicates that the standalone second quarter would need to generate revenue of ¥11.926 billion and operating profit of ¥5.365 billion. This is a mechanical benchmark that does not account for seasonality, but it will provide a basis for determining whether the early lead in operating profit is temporary or reflects an improvement in earnings capacity extending through the first half.