How much can the FY2027-H1 results reverse the first-quarter slide into the red?

FY2027-Q1 revenue was ¥4,109 million, down ¥498 million, or 10.8% year on year, from ¥4,607 million in the same period of the previous year. Operating income turned from a profit of ¥50 million to a loss of ¥121 million, ordinary income from a profit of ¥37 million to a loss of ¥148 million, and quarterly net income attributable to owners of the parent from a profit of ¥19 million to a loss of ¥168 million. Profitability deteriorated at multiple levels, not only at the top line.

The company’s full-year FY2027 forecasts are revenue of ¥18,000 million, operating profit of ¥300 million, ordinary profit of ¥230 million, and net income attributable to owners of the parent of ¥180 million. Revenue progress stood at only 22.8% as of Q1, while operating income was a loss of ¥121 million, putting simple full-year progress in negative territory. To achieve the full-year operating profit forecast after Q1, the company will need operating profit of at least ¥421 million over the remaining period, making it important to determine whether the loss can be reduced in H1.

However, the company’s business is seasonal, with demand for products such as New Year’s card printing concentrated in the third quarter. It is therefore inappropriate to assess H1 revenue against a simple 50% of the full-year forecast. At the next results announcement, it will be necessary to review not only cumulative H1 figures but also standalone Q2 revenue and operating income, the operating profit required in the second half, and order trends for New Year’s cards and imaging products. The key question is whether Q1’s weakness was temporary, caused by stricter order acceptance or a demand reversal, or whether it is continuing into H1.

The equity ratio had also fallen to 15.8% in FY2027-Q1, meaning that financial headroom will narrow further if losses continue in H1. At the next results announcement, the focus should be not only on whether the full-year forecasts are maintained, but also on how quantitatively the company explains the basis for achieving ¥300 million in operating profit, a return to profitability in standalone Q2, and profit recovery by segment.