Whether the 1Q earnings lead can be carried through to interim operating profit of ¥7,000 million

In the first quarter of the fiscal year ending March 2027, sales were ¥40,952 million, operating profit was ¥3,541 million, ordinary profit was ¥3,575 million and net income attributable to owners of the parent was ¥2,793 million. Year on year, sales increased 19.1%, operating profit 182.5%, ordinary profit 179.4% and net income 116.0%, meaning that profit grew faster than sales. The company attributed the increase in sales to higher sales driven by temporary demand linked to raw-material supply trends, as well as product price revisions in response to higher raw-material prices.

The revised interim forecasts are sales of ¥86,000 million, operating profit of ¥7,000 million, ordinary profit of ¥7,100 million and net income of ¥5,500 million. 1Q actual results represented 47.6% of the interim sales forecast, 50.6% of the operating profit forecast, 50.4% of the ordinary profit forecast and 50.8% of the net income forecast. Accordingly, the amounts required in 2Q alone are sales of ¥45,048 million, operating profit of ¥3,459 million, ordinary profit of ¥3,525 million and net income of ¥2,707 million.

Against the full-year forecast, 1Q progress was 24.4% for sales, calculated as ¥40,952 million ÷ ¥168,000 million, and 35.4% for operating profit, calculated as ¥3,541 million ÷ ¥10,000 million. 1Q represents approximately one-quarter of the fiscal year. Sales progress was broadly in line with time elapsed, while operating profit was ahead. Exceeding 50% progress against the interim operating profit forecast is positive in itself, but if the underlying factors are temporary demand and price revisions, it will be important to determine whether the interim plan can be achieved even if the margin declines in 2Q.

The 1Q quarterly report provided cumulative full-year and interim forecasts, but did not disclose standalone 2Q sales or operating profit forecasts, or the allocation of profit by quarter. At the next results announcement, it will be necessary to confirm at least whether the interim targets of ¥86,000 million in sales, ¥7,000 million in operating profit and ¥5,500 million in net income were achieved, and to analyze the reasons for achievement or shortfall by sales volume, price revisions, product mix and raw-material costs.