Can the profit growth seen in 1Q be sustained through H1?

In 1Q from April to June 2026, revenue was ¥89,157 million, up 7.3% year on year, operating income was ¥4,878 million, up 28.1%, ordinary income was ¥4,923 million, up 47.4%, and profit attributable to owners of the parent was ¥1,849 million, up 11.0%. The operating margin, calculated from these figures, was 5.5%, improving from approximately 4.6% in the year-earlier quarter.

Compared with the FY2027 full-year forecast, progress in 1Q was 26.6% for revenue, 26.4% for operating income, 30.8% for ordinary income and 28.4% for profit attributable to owners of the parent. Revenue and operating income both exceeded the simple 25% benchmark for the elapsed portion of the fiscal year, so at least as of 1Q, results were not materially behind the full-year plan. However, the company has not disclosed numerical forecasts for H1, so the 50% figures above are reference benchmarks calculated by mechanically allocating the full-year forecasts to six months; they are not the company's own plans.

By contrast, FY2026 revenue was ¥347,200 million and operating income was ¥20,538 million, while the FY2027 full-year forecasts are revenue of ¥335,000 million and operating income of ¥18,500 million. Compared with the previous year's results, the plan calls for revenue to decline 3.5% and operating income to decline 9.9%, so the 1Q increases in revenue and profit do not by themselves indicate a change in the full-year outlook for lower revenue and profit. It will be necessary to determine whether 1Q's strong performance continues into 2Q and beyond, rather than being limited to a temporary increase in sales volume or foreign-exchange effects.

For H1, the mechanical benchmarks are revenue of ¥167,500 million, operating income of ¥9,250 million, ordinary income of ¥8,000 million and profit attributable to owners of the parent of ¥3,250 million. If operating income progress falls below revenue progress, in particular, the 1Q improvement in margins may not continue. In addition, if further extraordinary losses are recorded in H1, progress toward final profit could fall below plan even if operating income remains on track. The maintenance of the earnings forecast and the reasons for any revision should therefore be reviewed together.