FY2027 plan calls for higher revenue and operating profit but lower ordinary profit

FY2026 consolidated results were revenue of ¥16,777 million, operating profit of ¥764 million, ordinary profit of ¥843 million and net income attributable to owners of the parent of ¥497 million. In contrast, the FY2027 company plan calls for revenue of ¥17,000 million, operating profit of ¥800 million, ordinary profit of ¥740 million and net income of ¥500 million. Compared with the previous fiscal year, revenue is expected to increase by approximately 1.3%, operating profit by approximately 4.7% and net income by approximately 0.6%, while ordinary profit is expected to decline by approximately 12.2%.

Based on the ordinary profit margin, FY2026 actual results were approximately 5.0% (¥843 million ÷ ¥16,777 million), while the FY2027 plan is approximately 4.4% (¥740 million ÷ ¥17,000 million). The company has maintained a target of an ordinary profit margin on revenue of at least 10.0%, but FY2026 actual results fell well short of that target, and the FY2027 plan does not anticipate a recovery. For the first quarter, a simple quarterly allocation would imply revenue of ¥4,250 million and operating profit of ¥200 million as benchmarks. However, because the plan calls for product launches to be concentrated in the second half, any shortfall should be assessed together with launch timing and order conditions.

In FY2026, the company recorded a foreign exchange gain of ¥98.775 million as non-operating income, meaning that the ¥843 million of ordinary profit also included an exchange-rate effect. The FY2027 ordinary profit plan is ¥740 million, ¥103 million below the previous fiscal year's result, so the extent to which a smaller foreign exchange gain or a reversal to an exchange loss is incorporated into the plan is important. At present, however, the company has not disclosed a bridge breaking down the factors behind the decline in ordinary profit into foreign exchange, interest rates and other non-operating income and expenses.

At the next earnings release, the focus will be not only on whether operating profit is tracking the plan, but also on the gap between operating and ordinary profit, foreign exchange gains and losses, interest expense and other non-operating items. If operating profit increases but ordinary profit falls short of the plan, this could indicate reduced reliance on temporary non-operating income rather than improved product profitability, affecting the likelihood of achieving full-year net income of ¥500 million and earnings per share of ¥61.88.