First-quarter revenue is on track, while building operating profit in the first half is the challenge

Consolidated revenue for the first quarter of the fiscal year ending March 2027 was ¥27,285 million, up 11.2% year on year, while operating profit was ¥709 million, up 170.6%. Ordinary profit was ¥989 million and net profit attributable to owners of the parent was ¥437 million, with both turning profitable from losses in the year-earlier quarter. The full-year forecasts are revenue of ¥115,300 million, operating profit of ¥3,600 million, ordinary profit of ¥2,250 million and net profit of ¥1,000 million.

A simple calculation of first-quarter progress against the full-year forecasts gives 23.7% for revenue, 19.7% for operating profit, 43.9% for ordinary profit and 43.7% for net profit. Revenue is close to the 25% benchmark for an even quarterly progression, while operating profit is below it. By contrast, ordinary profit and net profit had already reached more than 40% of their full-year targets in the first quarter, indicating that below-operating-profit earnings, including non-operating gains and losses and taxes, are progressing ahead of operating profit.

Using a mechanical 50% first-half benchmark without taking seasonality into account, the cumulative first-half benchmarks are revenue of ¥57,650 million, operating profit of ¥1,800 million, ordinary profit of ¥1,125 million and net profit of ¥500 million. Working back from first-quarter results, revenue and operating profit would reach these benchmarks if standalone second-quarter revenue of approximately ¥30,365 million and operating profit of approximately ¥1,091 million were secured. Ordinary profit would reach 50% with an additional approximately ¥136 million in the second quarter, and net profit with approximately ¥63 million.

In its first-quarter results, the company said performance was progressing broadly in line with plan and left its previously announced forecasts unchanged. However, the quarterly plan and the breakdown showing seasonality have not been disclosed, so whether the 50% first-half benchmark can be achieved cannot be judged from the simple progress rate alone. Next time, in addition to cumulative revenue and operating profit, we would like to confirm the basis for leaving the full-year forecasts unchanged, the profit margin assumed for the second quarter and a quantitative explanation of the foreign-exchange factors affecting ordinary profit and below.