Whether the strong lead from FY2027-Q1 will be maintained in FY2027-H1

Revenue in FY2027-Q1 was ¥303.896 billion and operating profit was ¥23.224 billion, up 16.7% and 26.4%, respectively, from the same period a year earlier. Progress against the full-year revenue forecast of ¥1,200.000 billion was approximately 25.3%, while progress against the operating profit forecast of ¥80.000 billion was approximately 29.0%, with operating profit progress ahead of revenue. The operating margin also improved to approximately 7.6% from approximately 7.1% in the same period a year earlier.

On a simple calculation, the company needs to generate an additional ¥896.104 billion in revenue and ¥56.776 billion in operating profit after Q1 to achieve its full-year forecasts. This does not assume that the Q1 operating margin will continue unchanged, but it will be important to determine whether profit continues to lead revenue in the first half. FY2026-H1 revenue was ¥535.645 billion and operating profit was ¥32.920 billion, making these the first benchmarks for comparison at the next results announcement.

The company attributed the increase in Q1 profit to higher customer production volumes, the effect of higher sales and cost improvements. It has not disclosed the profit contribution, volume effect, price effect or foreign exchange effect of each factor, however. Since order intake, order backlog and customer production volumes have also not been disclosed numerically, it is not yet possible to sufficiently separate whether Q1 operating profit of ¥23.224 billion resulted from higher sales volumes or included a temporary contribution from cost improvements.

At the next FY2027-H1 results announcement, it will be necessary to check revenue, operating profit, operating margin and first-half progress against the full-year forecasts. In particular, if first-half operating profit exceeds ¥32.9 billion and the operating margin remains around 6.1%, it will be easier to assess the sustainability of the margin improvement that began in Q1. If the operating margin falls sharply from Q1's 7.6% despite higher revenue, the focus will be on whether cost improvements and the effect of higher sales continue through the second half and whether the full-year forecasts need to be revised.