With first-quarter sales ahead of plan, the focus is on whether profit catches up in the first-half cumulative results

In the first quarter of FY2027, sales were ¥40,762 million and operating profit was ¥556 million, up 4.4% and 3.7%, respectively, year on year. Ordinary profit was ¥794.658 million and net income attributable to owners of the parent was ¥559.940 million, with all major profit measures remaining positive.

The FY2027 full-year forecast is sales of ¥169,852 million and operating profit of ¥2,725 million, putting first-quarter progress at approximately 24.0% and 20.4%, respectively. Using half of the full-year forecast as a simple benchmark for the first-half cumulative results, sales would be ¥84,926 million and operating profit ¥1,362.5 million. However, seasonality in the steel sales business and the timing of sales in the first and second halves have not been disclosed, so 50% is only a mechanical comparison benchmark for measuring progress, not a company target.

In FY2026, sales were ¥158,751 million and operating profit was ¥2,509.849 million. The FY2027 forecast assumes increases of approximately 7.0% in sales and 8.6% in operating profit from the previous year. First-quarter operating profit progress of 20.4% was below sales progress of 24.0%. It will be important to see whether operating profit progress comes closer to sales in the first-half cumulative results and whether the assumptions supporting the remaining second-half sales of ¥129.090 billion and operating profit of ¥2.1689 billion remain valid.

The first-quarter earnings report stated that there had been no changes to the consolidated forecasts for the cumulative second quarter and full year, but the forecast amounts for first-half cumulative sales and operating profit themselves could not be confirmed. At the next results announcement, it will be necessary to check first-half results, progress against the full-year forecast, whether the full-year forecast has been revised, and whether the lower operating profit progress than sales is temporary.