Whether the first-quarter return to operating profitability will continue into the first half

First-quarter revenue was ¥638 million, down 4.3% from ¥667 million in the same quarter of the previous year. Operating income turned from a ¥10 million loss in the same quarter of the previous year to a ¥31 million profit, while ordinary income turned from a ¥26 million loss to a ¥23 million profit. Profit attributable to owners of the parent was a ¥9 million loss, although this was narrower than the ¥65 million loss recorded in the same quarter of the previous year. The improvement in operating profit despite the lack of revenue growth is the first change to verify in the next interim results.

The full-year forecasts are revenue of ¥2,608 million, operating income of ¥71 million, ordinary income of ¥40 million and profit attributable to owners of the parent of ¥12 million. As of the first quarter, progress was 24.5% for revenue, 43.7% for operating income and 57.5% for ordinary income. On a simple calculation, achieving full-year revenue will require total revenue of ¥1,969 million in the second through fourth quarters, or an average of ¥656.3 million per quarter. The full-year plan can be reached with ¥40 million of remaining operating income and ¥17 million of remaining ordinary income, so whether cumulative operating and ordinary profitability can be maintained in the first half will determine whether an excessive concentration of profit in the second half is required.

The substance of the profit improvement is not simply a recovery in sales volume. In the first quarter, the Wellness business generated revenue of ¥490.634 million and operating income of ¥28.153 million, with revenue down approximately 6.0% year on year and operating income down 54.3%. The Financial business, meanwhile, generated revenue of ¥148.314 million and operating income of ¥2.954 million. Consolidated operating income of ¥31 million was therefore secured through the Financial business turning profitable and a reduction in company-wide expenses, despite the decline in profit in the Wellness business. It is necessary to determine whether profit improvement without a recovery in revenue will prove temporary.

The bottom line included ¥10.000 million in contract fee income as extraordinary income and a ¥32.915 million settlement payment as an extraordinary loss. Even when operating income and ordinary income are profitable, the structure remains such that extraordinary items and tax expenses can leave profit attributable to owners of the parent in the red. The first-quarter materials do not disclose interim profit targets or a specific first-half plan against full-year net income of ¥12 million. Accordingly, in FY2027-H1, the recurrence of extraordinary items, changes in tax effects and whether net income turns profitable should be checked separately from operating income.