FY2027 Q1: Profit deteriorated more than revenue, making H1 recovery the key focus

Revenue for FY2027 from April through June was ¥1,149.717 million, down ¥30.283 million, or 2.6%, from ¥1,180.000 million in the same period of the previous year. The operating loss was ¥16.114 million, widening by ¥10.114 million from the ¥6.000 million loss in the same period of the previous year. Ordinary loss was ¥14.271 million, compared with a ¥4.000 million loss a year earlier, while net income attributable to owners of the parent swung from a ¥1.000 million profit in the previous year to a loss of ¥11.067 million.

The deterioration in profit exceeded the ¥30.283 million decline in revenue. In Q1, ¥3.167 million in compensation received and ¥0.945 million in insurance surrender proceeds were recorded as extraordinary income, totaling ¥4.112 million. There was also an extraordinary loss of ¥0.397 million from the cancellation of insurance, but the bottom line was still a loss of ¥11.067 million. Accordingly, H1 will require improvement not only in revenue but also at the operating level, including the gross margin and selling, general and administrative expenses.

The FY2027 full-year forecasts in the financial summary are revenue of ¥4,900 million, operating profit of ¥35 million and net income attributable to owners of the parent of ¥20 million. Q1 revenue represents a simple 23.5% of the full-year revenue forecast, without adjusting for seasonality. As Q1 posted an operating loss of ¥16.114 million, achieving full-year operating profit of ¥35 million will require cumulative operating profit of ¥51.114 million from Q2 through Q4.

As of Q1, the full-year forecasts were unchanged from the previous forecasts, but the company's assessment of H1 revenue, operating profit or loss and the full-year forecasts has not yet been disclosed. At the next results announcement, we will monitor whether cumulative Q2 operating profit or loss turns positive, whether the assumption of ¥35 million in full-year operating profit can be maintained if losses continue, and how the company explains progress toward revenue of ¥4,900 million.