Revenue is growing faster than operating profit, which needs to recover in the first half.

First-quarter revenue was ¥15,203 million, up 12.2% from ¥13,554 million a year earlier, while operating profit was ¥3,083 million, up only 3.2% from ¥2,988 million. The operating margin declined by approximately 1.8 percentage points, from around 22.0% a year earlier to approximately 20.3%, indicating that profit growth is lagging revenue growth. Ordinary profit was ¥3,431 million and net income attributable to owners of the parent was ¥2,415 million, up 15.5% and 13.0% year on year, respectively, but the full benefit of higher revenue had not yet reached the operating-profit level.

The company’s full-year forecasts are revenue of ¥60,000 million and operating profit of ¥12,700 million, putting first-quarter progress at 25.3% and 24.3%, respectively. If half of the full-year forecast is used simply as a benchmark for the first half, first-half revenue of ¥30,000 million and operating profit of ¥6,350 million would be the targets, requiring standalone second-quarter revenue of ¥14,797 million and operating profit of ¥3,267 million based on first-quarter results. These figures are mechanical benchmarks, not the company’s published half-year forecasts. As seasonality and delivery timing have not been disclosed, order and shipment timing should also be reviewed alongside first-half results.

First-quarter revenue by product was ¥9,088 million for fixed gas detection and alarm equipment, ¥5,743 million for portable gas detection and alarm equipment, and ¥371 million for other measuring instruments. The company attributed revenue growth to demand from semiconductors, lithium-ion batteries, shipbuilding, power, construction, chemicals and defense-related sectors, as well as production rationalization and expense reductions. However, it did not disclose the revenue contribution from each demand category or the amounts of cost and expense reductions. The company also reports a single segment, so the source of the margin decline cannot be isolated using segment operating profit.

For FY2027-H1, the focus is whether the first-half operating margin recovers to around 21.2%, the mechanical benchmark based on half of the full-year forecast, or remains near the first-quarter level of 20.3%. Even if revenue reaches ¥30,000 million, operating profit below ¥6,350 million could indicate that higher raw-material costs, labor costs, overseas subsidiary expenses and new-product development costs are absorbing the benefit of higher revenue. Key points in the earnings release will be the monetary impact of cost reductions and expense cuts, changes in SG&A expenses, product-level margins, and whether the full-year operating profit forecast of ¥12,700 million is maintained or revised.