Higher utilization is driving FY2027 earnings growth; the next question is whether the recovery can be sustained

In the first quarter of the fiscal year ending March 2027, revenue was ¥5,946 million, operating profit was ¥216 million, ordinary profit was ¥274 million, and quarterly net income attributable to owners of the parent was ¥174 million. Operating profit growth of 79.6% exceeded revenue growth of 11.1% year on year, and the operating margin disclosed in the presentation materials also rose to 3.6%. The full-year forecasts are revenue of ¥24,170 million and operating profit of ¥747 million. Progress as of the first quarter was 24.6% and 29.3%, respectively, with profit advancing faster than revenue.

Revenue by business area was ¥4,771 million from nursing care, ¥585 million from disability support, ¥561 million from childcare, and ¥29 million from other businesses. Nursing-care revenue rose 10.8% year on year, while disability support and childcare grew 36.8% and 31.4%, respectively, indicating higher growth rates outside nursing care. In terms of utilization, occupancy was 90.2% at paid senior homes open for at least 1 year, 94.2% at nursing-care group homes, and 86.6% at disability-support group homes. Nursing-care group-home occupancy was down 0.3 percentage points year on year, so the improvement cannot be characterized as uniform across all facilities.

In the earnings explanation, improvement at underutilized facilities was identified as the largest contributor to higher profit. The factor breakdown showed a ¥390 million contribution from this factor, a negative ¥108 million impact from new openings, and an ¥11 million contribution from M&A. This suggests that current profit growth depends more on the recovery of utilization at existing facilities than on the ramp-up of newly opened facilities. Nursing care, disability support, and childcare are treated as a single statutory segment, and operating profit by business area and profit margins by facility have not been disclosed.

For FY2027-H1, revenue of ¥12,085 million and operating profit of ¥373.5 million will serve as key progress thresholds. In addition, it will be necessary to monitor whether occupancy can be maintained at around 90% at paid senior homes, 94% at nursing-care group homes, and in the 86% range at disability-support group homes, and whether the contribution from improvements at underutilized facilities can follow the ¥390 million recorded in the first quarter. If the negative impact from new openings expands again and the operating margin falls below 3.6%, the benefits of higher utilization may be being absorbed by personnel expenses and start-up costs.