Q1 sales are running ahead of the full-year plan, but there is little margin for error in the earnings plan

FY2027-Q1 revenue was ¥753 million, operating profit was ¥28 million, ordinary profit was ¥37 million and net income was ¥44 million. Revenue was down just 1.1% year on year, while operating profit fell 37.5% and ordinary profit fell 28.1%, making the deterioration in margins more notable than the change in sales.

The operating margin was approximately 3.8%, down approximately 2.2 percentage points from approximately 6.0% in the same quarter of the previous year.

Revenue of ¥753 million represents 28.4% of the full-year forecast of ¥2,650 million. Assuming a simple 25% progression each quarter, this is approximately 3.4 percentage points ahead, so the start of the year is not slow when judged by revenue alone. However, FY2026-H1 revenue was ¥1,441 million and FY2026 full-year revenue was ¥2,797 million, meaning the FY2027 full-year forecast of ¥2,650 million is ¥147 million below the previous year's actual result. Whether ¥1,325 million can be secured in H1 will be the first benchmark for assessing the realism of the full-year forecast.

On the earnings side, the FY2027 full-year forecasts are ¥0 million for operating profit, ¥20 million for ordinary profit and ¥30 million for net income. Since Q1 alone produced operating profit of ¥28 million and ordinary profit of ¥37 million, a simple progress-rate calculation is difficult. In particular, with the operating profit forecast at ¥0 million, it will be necessary to confirm through the company's explanations whether the forecast assumes that raw material and logistics costs, project mix and selling expenses will weigh on earnings from Q2 onward, or whether the forecast is conservative.

For FY2027-H1, we will monitor cumulative revenue, the operating margin, each segment's contribution to earnings and whether the full-year forecasts are revised. The company did not prepare a quarterly cash flow statement for Q1 and did not disclose cash flow from operating activities, so it will also be important in H1 to determine whether earnings are accompanied by actual cash collection.