FY2027-Q1 was ahead of the full-year plan on profit, with the sustainability of momentum to be assessed in FY2027-H1

FY2027-Q1 revenue was ¥11,745 million, up 25.5% year on year, while operating profit was ¥534 million, up 165.0%. Operating profit growth substantially outpaced revenue growth, taking the operating margin to approximately 4.6% on a simple calculation. The company cited the rapid reflection of changes in material prices in selling prices, operational efficiency gains from digital technologies, expansion of its sales network and improved sales coordination with subsidiaries as factors behind the improvement.

The full-year forecast is revenue of ¥45,900 million and operating profit of ¥1,793 million. Q1 progress was 25.6% for revenue and 29.8% for operating profit, putting operating profit approximately 4.2 percentage points ahead of revenue. The gap to the full-year forecast is ¥34,155 million for revenue and ¥1,259 million for operating profit, which must be accumulated over the remaining 3 quarters. However, given the business's concentration of revenue in the second half, it would not be appropriate to simply extrapolate Q1 progress to an annual run rate.

In FY2026-H1, revenue was ¥19,862.8 million and operating profit was ¥518.3 million. In the upcoming FY2027-H1, it will be necessary to assess whether Q1's strong growth continues into Q2 or whether profit growth slows as the benefits of price revisions run their course. In particular, separating Q2 revenue and operating profit from first-half cumulative operating margin should make it easier to determine whether Q1's profit growth was temporary or represents an improvement in profitability throughout the first half.

As of now, the company has not disclosed a breakdown of the full-year forecast by factor, orders received, order backlog or revenue by product or sales office. Accordingly, in FY2027-H1 it will be important to assess not only year-on-year revenue and operating profit, but also whether orders, the sustainability of price pass-through and the impact of changes in the scope of consolidation support maintaining the full-year forecasts of ¥45,900 million and ¥1,793 million.