FY2027 forecast calls for higher revenue and operating profit, but lower net income and dividends

In FY2026, revenue fell 1.5% year on year to ¥8,294 million, while operating profit rose 38.1% to ¥253 million, ordinary profit increased 22.9% to ¥294 million, and net income attributable to owners of the parent rose 22.0% to ¥235 million. By contrast, the company's FY2027 forecast calls for revenue of ¥9,300 million, operating profit of ¥290 million, ordinary profit of ¥320 million and net income of ¥230 million. Operating profit is expected to increase 14.4%, while net income is expected to decline 2.3%. The annual dividend forecast has also been reduced by ¥3, from ¥24 in the previous year to ¥21, implying a payout ratio of 30.8%.

If the full-year forecast is simply divided into four equal quarters, FY2027-Q1 benchmarks would be revenue of ¥2,325 million, operating profit of ¥72.5 million, ordinary profit of ¥80 million and net income of ¥57.5 million. These are mechanical benchmarks that do not account for seasonality and are not quarterly targets provided by the company. FY2026-Q1, the comparable quarter, recorded revenue of ¥1,878 million, an operating loss of ¥22 million, an ordinary loss of ¥10 million and a net loss of ¥11 million. The next results therefore need to be assessed not only for a return to profitability, but also for whether earnings have improved to levels consistent with the full-year plan.

The key issue is that net income is planned to decline from the FY2026 actual figure even though operating profit is expected to increase. FY2026 included no extraordinary income or extraordinary losses and no impairment loss. The current earnings forecast does not provide a sufficient breakdown of the tax expense, non-operating income and expenses, or future investment burden that would explain the difference from the FY2027 forecast. In FY2027-Q1, it will be necessary to check the decline from operating profit to ordinary profit, pretax profit and net income, as well as the assumptions underlying the maintenance of the ¥21 annual dividend and whether the earnings forecast has been revised.