Revenue up, operating profit down; first focus is the likelihood of achieving the ¥630 million FY2027 forecast

First-quarter revenue was ¥16,930 million, up ¥2,350 million, or 16.1%, from ¥14,580 million in the same period last year. However, operating profit fell ¥6 million to ¥127 million from ¥133 million, while ordinary profit also fell short of the ¥176 million recorded in the same period last year at ¥174 million. Net profit attributable to owners of the parent was ¥118 million, down 15.7% from ¥140 million in the same period last year. The fact that revenue growth has not translated directly into profit growth is the first point to check at the next earnings announcement.

The company's FY2027 full-year forecasts are revenue of ¥70,000 million, operating profit of ¥630 million, ordinary profit of ¥630 million and net profit attributable to owners of the parent of ¥500 million. Based on first-quarter results, simple progress rates are 24.2% for revenue, 20.2% for operating profit, 27.6% for ordinary profit and 23.6% for net profit. This is a mechanical calculation that does not account for seasonality and does not directly indicate full-year achievement, but the lower progress in operating profit than in revenue or ordinary profit indicates that margins need to recover.

As factors behind the decline in profit, the company cited its inability to secure gross profit as expected because of lower catches, particularly of popular fish, as well as higher logistics costs. However, the first-quarter materials do not disclose the impact of lower catches on gross profit, the increase in logistics costs or the pass-through rate to selling prices. In the second-quarter results, it will be necessary to distinguish whether revenue growth came from higher volumes or higher unit prices, and how much of the higher costs could be absorbed or passed on.

By segment, the seafood wholesale business recorded revenue of ¥16,518 million and segment profit of ¥2 million; the refrigerated warehousing business recorded revenue of ¥374 million and profit of ¥107 million; and the real estate leasing business recorded revenue of ¥37 million and profit of ¥17 million. The overall increase in revenue was mainly driven by the wholesale business, but its profit remained at the same level as in the same period last year. At the next announcement, it will be necessary to check how far cumulative second-quarter operating profit has progressed against the ¥630 million full-year forecast, together with trends in the gross profit margin and logistics costs.