Can first-quarter revenue and profit growth be carried through to the first half and full-year targets?

FY2027-Q1 revenue was ¥13,597 million, operating profit was ¥874 million, ordinary profit was ¥976 million, and net profit attributable to owners of the parent was ¥636 million. Compared with revenue of ¥12,340 million and operating profit of ¥639 million in the same period of the previous year, the 10.2% increase in revenue was significantly exceeded by the 36.9% increase in operating profit. The operating margin rose from approximately 5.2% in the same period of the previous year to approximately 6.4% in the current period, marking a start characterized by improved margins as well as revenue growth, rather than simply an expansion in sales volume.

The company's FY2027 full-year forecasts are revenue of ¥58,000 million, operating profit of ¥4,220 million, ordinary profit of ¥4,360 million, and net profit attributable to owners of the parent of ¥3,000 million. First-quarter progress was 23.4%, 20.7%, 22.4% and 21.2%, respectively. Revenue, ordinary profit and net profit were close to a simple one-quarter run rate, while operating profit was somewhat lower. The earnings presentation materials describe first-quarter progress as “in line with expectations,” making it important to see whether the operating-profit shortfall narrows in the first half.

Reaching 50% of the full-year forecast in the first half is merely a simple progress benchmark that does not account for seasonality; it is not the company's first-half forecast. Accordingly, ¥29,000 million in revenue and ¥2,110 million in operating profit should not be treated mechanically as earnings forecasts, but used as reference points for assessing whether revenue and profit growth continues above FY2026-H1 revenue of ¥26,179 million and operating profit of ¥1,675 million, and whether margins can remain in the 6% range.

Profit improvement in the first quarter reflected growth in the Electronics and Semiconductors, Machine Tools and Environment segments, as well as increased sales of proprietary products. Conversely, Rubber and Tires had no large project comparable with the previous year's project, while Paper and Pulp lacked the special demand seen in the previous year, leaving revenue headwinds in place. In FY2027-H1, we will assess whether the growth areas can continue to offset declines in weaker areas, whether the full-year forecasts are maintained, and whether the improvement in operating margin is non-recurring, together with segment-level revenue and profit.