Even after the upward revision, the focus for FY2027 is the likelihood of achieving the plan for higher revenue but lower profit.

Consolidated revenue in FY2027-Q1 was ¥91.712 billion, operating profit was ¥10.178 billion, ordinary profit was ¥11.657 billion and quarterly profit attributable to owners of the parent was ¥8.160 billion. The full-year forecasts are revenue of ¥370.0 billion, operating profit of ¥34.0 billion, ordinary profit of ¥39.0 billion and profit attributable to owners of the parent of ¥31.0 billion. Progress as of Q1 was approximately 24.8% for revenue, 29.9% for operating profit, 29.9% for ordinary profit and 26.3% for net profit. Since profit is progressing ahead of revenue, the first point to monitor is whether this lead in profit progress continues through the first half.

In the Q1 disclosure, the operating profit forecast was raised by ¥2.0 billion from ¥32.0 billion to ¥34.0 billion, the ordinary profit forecast was raised by ¥2.0 billion from ¥37.0 billion to ¥39.0 billion, and the forecast for profit attributable to owners of the parent was raised by ¥1.0 billion from ¥30.0 billion to ¥31.0 billion. The revenue forecast was unchanged at ¥370.0 billion. Rather than reflecting upside in volumes or construction progress, the profit revisions primarily reflect improved profitability and risk estimates across the businesses. The assumed exchange rate was also revised from ¥150 to ¥158 per US dollar, so the first-half results will need to distinguish the impact of the change in the exchange-rate assumption on profit from whether the profit after the upward revision is sustainable or one-off.

FY2026 results were revenue of ¥353.196 billion, operating profit of ¥37.641 billion and an operating margin of 10.7%. For FY2027, revenue is forecast to rise 4.8% year on year to ¥370.0 billion, while operating profit is forecast to decline 9.7% to ¥34.0 billion and the operating margin is expected to fall to approximately 9.2%. In other words, while the company plan assumes higher revenue, it incorporates higher fixed costs associated with the investment phase and procurement costs, and anticipates a decline in the operating margin of approximately 1.5 percentage points from 10.7% in FY2026.

For FY2027-H1, the key points to monitor are cumulative first-half revenue and operating profit and their progress against the full-year forecasts, as well as whether the full-year forecasts are revised again. At present, the company has not disclosed the first-half profit plan by segment or the amounts assumed for risks related to the situation in the Middle East and higher procurement costs. The extent to which first-half operating profit progresses against the full-year forecast of ¥34.0 billion, and whether it can maintain the 29.9% lead recorded in Q1, will help assess the validity of the full-year plan for lower profit.