Whether the shipping delays have been resolved and the 518 units in the order backlog will convert into H1 revenue

Q1 revenue was ¥1,812 million, up just 1.3% year on year, but the materials explain that the main causes of the weak performance were delays in building-confirmation applications and the postponement of shipments caused by the naphtha shock, rather than a loss of demand. The period from structural-calculation orders to SE Structural System shipments was approximately 35 days longer than in the same period a year earlier, and approximately 50 projects were also delayed by the naphtha shock.

In assessing the conversion of orders into shipments, the gap between 258 residential structural-calculation shipments, up 22.9% year on year, and 197 SE Structural System shipments, down 5.3%, is important. As the calculation process was ahead of shipments at the Q1 stage, suggesting that shipments were lagging, it will be necessary to check in H1 whether the cumulative gap between the two has narrowed and whether the average number of days from structural calculation to shipment has improved.

The company expects the delays to be resolved in Q2 and revenue from エヌ・シー・エヌ and MUJI HOUSE to recover. However, 518 projects remained unshipped at the end of Q1, while residential revenue was ¥1,167 million, up just 2.3% year on year. In the H1 results, it will be important to disclose how many of the 518 projects were actually shipped and recognized as revenue, on a unit basis rather than through revenue alone.

In non-residential operations, structural-calculation shipments were also down 8.9% year on year to 51 units. In H1, the points to monitor will include not only the resolution of delays in residential operations, but also the recovery in shipments of large non-residential projects and whether the average unit price of shipped projects has recovered. Unless a reduction in the unshipped backlog, the processing of approximately 50 delayed projects and normalization of lead times are confirmed at the same time, the expected recovery in revenue from Q2 onward will remain a hypothesis.