Q1 was broadly in line with the full-year plan, but the quality of earnings differed.

FY2027-Q1 revenue was ¥270,175 million, up 10.1% year on year, while operating profit was ¥12,209 million, up 10.9%. Revenue progress against the ¥1,092,000 million full-year forecast was approximately 24.7%, and operating profit progress against the ¥54,000 million forecast was approximately 22.6%. Revenue was therefore broadly in line with the 25.0% quarterly run rate, while operating profit was somewhat behind. The full-year forecasts have not been revised at this stage, and the H1 results will need to establish whether this gap reflects temporary seasonality or front-loaded expenses.

By profit level, ordinary profit was ¥11,588 million, up only 1.9% year on year, a substantial gap from the 10.9% growth in operating profit. The assessed earnings-release data do not provide a sufficient breakdown of the specific components of non-operating income and expenses or the extent of the impact from investment- and finance-related gains and losses. In H1, it will be important to determine whether ordinary profit, as well as operating profit, is tracking revenue growth and whether fluctuations in non-operating income and expenses are affecting the achievability of the full-year plan.

Quarterly net profit attributable to owners of the parent was ¥6,901 million, down 67.5% year on year. This was explained mainly as a reversal of the impact of additional deferred tax assets recognised in the year-earlier quarter in connection with the absorption-type merger of the former I&H Co., Ltd., and does not by itself indicate a deterioration in operating profitability. The full-year net profit forecast is ¥32,800 million, down 27.1% from the previous year’s actual result. In H1, it will therefore be important to distinguish the pre-tax profit excluding the tax-effect reversal, the effective tax rate and the level of extraordinary gains and losses.

FY2026 revenue was ¥1,010,336 million and operating profit was ¥48,568 million, compared with the FY2027 company forecasts of ¥1,092,000 million and ¥54,000 million, respectively. The plan assumes increases of ¥81,664 million in revenue and ¥5,432 million in operating profit, making it important to determine whether Q1 results represent an appropriate start to the plan. As a benchmark for H1, revenue would need to reach at least ¥546,000 million and operating profit approximately ¥27,000 million on a simple calculation, while the company’s explanation of seasonality and second-half weighting will also require review.