FY2027 Q1 posted losses at all three levels, requiring a sharp recovery in the second half to meet the full-year forecast

In FY2027 Q1, revenue was ¥357.88 million, the operating loss was ¥133.91 million, the ordinary loss was ¥262.49 million and the net loss attributable to owners of the parent was ¥265.70 million, leaving the company loss-making at all three levels. Quarterly net loss per share was also ¥14.98. At the Q1 stage, the key issues to monitor are therefore containing the scale of losses and cash outflows, rather than generating profit.

The company’s FY2027 full-year forecasts are revenue of ¥2,337.00 million, operating profit of ¥221.00 million, ordinary profit of ¥120.00 million and net profit of ¥120.00 million. Q1 revenue represented only 15.3% of the full-year forecast on a simple progress basis. Since the company recorded an operating loss of ¥133.91 million in Q1, meeting the full-year forecast requires total operating profit of ¥354.91 million over the three quarters from Q2 through Q4. This required amount is a mechanical difference calculated from the full-year forecast and Q1 results, not a quarterly plan disclosed by the company.

FY2027 is the first fiscal year following the transition to consolidated financial statements, and no comparative analysis against consolidated figures for the same quarter of the previous year has been provided. Accordingly, FY2026 non-consolidated results cannot simply be compared year on year with FY2027 consolidated Q1 results. In addition, outdoor cemeteries and columbaria were combined into the “Cemetery Business,” making it impossible to determine from the Q1 figures alone whether the decline in revenue or the losses arose from existing outdoor cemeteries, the former columbaria business or the acquired business.

In the next report for FY2027 H1, it will be important to review not only cumulative revenue but also the extent to which operating results have improved from the Q1 loss and whether the company’s view of the full-year forecast has changed. If the full-year operating profit forecast of ¥221.00 million is maintained, the company will need to clearly reduce the loss in Q2 alone or on a cumulative Q2 basis and move closer to a position in which profit from the Funeral Services Business can absorb losses in the Cemetery Business and company-wide expenses.