Whether the sharp Q1 earnings growth can be repeated in the interim period of FY2027-H1

In FY2027-Q1, revenue was ¥62,708 million, operating income was ¥2,049 million, ordinary income was ¥2,738 million and net income attributable to owners of the parent was ¥1,876 million. Compared with revenue of ¥57,665 million, operating income of ¥1,426 million, ordinary income of ¥1,500 million and net income of ¥904 million in the same period a year earlier, revenue rose 8.7%, operating income 43.6%, ordinary income 82.5% and net income 107.5%. The fact that operating income growth substantially outpaced revenue growth, rather than simply reflecting higher revenue, is the starting point for assessing the next interim results.

For FY2027 as a whole, the company forecasts revenue of ¥310,000 million, operating income of ¥17,000 million, ordinary income of ¥15,500 million and net income attributable to owners of the parent of ¥10,500 million. On a simple calculation, FY2027-Q1 represented approximately 20.2% of the full-year revenue forecast, 12.1% of the operating income forecast, 17.7% of the ordinary income forecast and 17.9% of the net income forecast. However, the earnings presentation does not disclose progress ratios against the full-year forecasts. Accordingly, in FY2027-H1 it will be necessary to use the previous-year interim figures of ¥122,963 million in revenue, ¥4,577 million in operating income, ¥4,000 million in ordinary income and ¥2,789 million in net income as the basis for comparison, rather than the progress ratios presented by the company, and assess whether growth in revenue and profit has continued.

In FY2027-Q1, the drivers of changes in operating income included a ¥2.5 billion positive effect from volume and product mix, an ¥800 million positive effect from pricing and a ¥500 million positive effect from foreign exchange, offset by negative effects of ¥1.1 billion from raw-material costs, ¥1.5 billion from operating expenses and ¥500 million from the situation in the Middle East. For the interim period, the key questions are whether sales of special-purpose vehicles and aircraft continue to increase and whether higher operating expenses, including personnel and depreciation costs, can be absorbed. At the next earnings announcement, it will be necessary to monitor the 4 levels of consolidated profit, any changes to full-year forecasts, orders, revenue and operating income by segment, and whether the company newly discloses gross margin and SG&A breakdowns that were not provided in Q1.