FY2027-Q1: revenue increased but operating profit declined, with margin pressure from higher raw material costs and capital investment the focus for FY2027-H1

FY2027-Q1 revenue increased 12.4% year on year to ¥7,939 million, but operating profit fell 22.4% to ¥417 million, ordinary profit fell 25.4% to ¥461 million, and net income attributable to owners of the parent fell 24.5% to ¥315 million. The operating margin declined by approximately 2.4 percentage points, from approximately 7.6% in the year-earlier period to approximately 5.3%, so the increase in revenue has not translated directly into profit growth.

On earnings, the company attributed the increase in revenue to higher orders for automotive-related components and printer components, while citing higher plastic raw material prices and aggressive capital investment as factors behind the decline in profit. However, no disclosure was identified that breaks down the effects of higher raw material costs, price pass-through, labor-saving benefits, depreciation, and capital investment into their respective impacts on the change in operating profit. Depreciation in the first quarter was ¥323.337 million, making the extent to which this burden increases in the interim period a point to monitor.

The full-year forecast was changed on 17 June from revenue of ¥31 billion and operating profit of ¥3.1 billion at the time of the fiscal year ended March 2026 results to revenue of ¥30 billion and operating profit of ¥2.7 billion, and the same levels were shown in the subsequent first-quarter summary report. Since first-quarter operating profit represented only 15.4% of the full-year forecast, assuming half of the full-year forecast as a simple interim benchmark would require standalone second-quarter operating profit of approximately ¥933 million. We will track whether the company can secure ¥1.35 billion for the interim period and whether it provides specific explanations of the impact of higher raw material prices and progress in passing them through to prices.