FY2027-Q1 is broadly on track against the full-year plan, but we want to see operating profit build toward the target in H1.

In the first quarter of the fiscal year ending March 2027, revenue was ¥2,518 million, operating profit was ¥131 million, ordinary profit was ¥141 million and net profit attributable to owners of the parent was ¥102 million. The full-year forecasts are revenue of ¥9,500 million, operating profit of ¥500 million, ordinary profit of ¥500 million and net profit of ¥350 million, implying simple progress rates of 26.5% for revenue, 26.2% for operating profit, 28.2% for ordinary profit and 29.1% for net profit. All profit measures exceeded the 25% mark after three months, indicating that the first-quarter start was slightly ahead of plan, at least on a simple progress basis.

However, the company’s results are affected by the timing of demand and deliveries for automotive products, air-conditioning-related products and materials for public works. Exceeding 25% alone therefore does not indicate that the full-year plan will be exceeded. For operating profit, we use ¥250 million, half of the ¥500 million full-year forecast, as a mechanical H1 benchmark and will monitor whether the company can add approximately ¥119 million in the second quarter to the ¥131 million reported in the first quarter. If operating profit falls below this level, the company would need to generate ¥369 million in the second half, making stronger seasonality or greater benefits from price pass-through necessary to achieve the plan.

The first-quarter financial summary does not disclose detailed quarterly cash flow information. Operating cash flow, investing cash flow, financing cash flow and the balance of cash and cash equivalents therefore cannot be confirmed. The equity ratio was 73.2%, total assets were ¥10,179 million and net assets were ¥7,452 million, with no major change in the financial foundation. However, whether earnings are translating into actual cash collections will be easier to verify for the first time through the interim cash flow figures for FY2027-H1.

At the next results announcement, we will monitor not only the revenue progress rate but also whether operating profit reaches around ¥250 million, whether the first-quarter operating margin of approximately 5.2% can be maintained, and how much of the ¥500 million full-year forecast remains to be generated. Even if the company leaves its forecasts unchanged, it will be important to confirm how much of the plan was delivered in FY2027-H1, how much will depend on the second half, and how much of the increases in raw material costs, personnel expenses and import costs was absorbed through price revisions.