FY2027-Q1 operating loss is running high against the full-year loss plan

FY2027-Q1 consolidated revenue was ¥3,235 million, down 3.4% from ¥3,351 million in the same quarter of the previous year. The operating loss was ¥162 million, the ordinary loss was ¥131 million and the net loss attributable to owners of the parent was ¥192 million, putting the operating margin at approximately -5.0% on a calculated basis. Profitability deteriorated by more than the decline in revenue, from an operating loss of ¥99 million and an operating margin of approximately -3.0% in the same quarter of the previous year.

The company's FY2027 full-year forecasts are revenue of ¥13,500 million, an operating loss of ¥350 million, an ordinary loss of ¥300 million and net income attributable to owners of the parent of ¥0 million. Q1 revenue was approximately 24.0% of the full-year forecast, close to the 25% mark expected if progress were even each quarter. The operating loss, however, had already reached approximately 46.2% of the full-year forecast loss, meaning that loss progress was significantly ahead of revenue progress.

The comparable FY2026 results were revenue of ¥14,133 million, an operating loss of ¥69 million, ordinary income of ¥23 million and net income attributable to owners of the parent of ¥353 million. The FY2027 company plan assumes not only a 4.5% year-on-year decline in revenue, but also a deterioration in operating income from a ¥69 million loss to a ¥350 million loss and in ordinary income from a ¥23 million profit to a ¥300 million loss. Whether the wider Q1 loss reflects a temporary seasonal factor or declining earnings power in the core business will determine the credibility of the full-year plan.

In FY2027-H1, ¥6,750 million in revenue and an operating loss of ¥175 million, half of the full-year plan, will be used as reference points. In particular, if the standalone Q2 operating loss substantially exceeds the ¥161 million recorded in Q1, the assumption of a ¥350 million full-year operating loss will become more demanding. Conversely, the key tests in the next results announcement will be whether pricing adjustments and production-efficiency measures in the core business progress, whether the H1 operating loss stays within ¥175 million and whether the company maintains its full-year forecast.