Can the strong start in Q1 translate into maintaining H1 sales and operating profit and the full-year plan?

The latest scheduled earnings announcement is 10 November 2026, making the FY2027-H1 results an opportunity to determine whether the strong Q1 performance was a temporary initial surge or extended across the first half. Q1 sales were ¥27,604 million, up 13.3% year on year, while operating profit turned positive at ¥656 million from an operating loss of ¥6 million in the same quarter of the previous year. Ordinary profit was ¥722 million, and profit attributable to owners of the parent was ¥558 million.

Q1 progress against the full-year forecasts was approximately 22.1% for sales, calculated as ¥27,604 million ÷ ¥125,000 million, and approximately 18.7% for operating profit, calculated as ¥656 million ÷ ¥3,500 million. Sales progress was slightly below the 25% mark after three months, while operating profit was lower still. Using 50% of the full year as a mechanical H1 benchmark gives ¥62,500 million in sales and ¥1,750 million in operating profit, but the company has seasonal fluctuations, so these levels should not be treated as the forecasts themselves. Performance must instead be assessed against H1 results and the same period of the previous year.

In FY2026-H1, sales were ¥53,472 million and operating profit was ¥922 million. FY2027 Q1 sales alone exceeded the ¥24,368 million recorded in the previous year's Q1, and operating profit also improved from a loss, making whether cumulative H1 results exceed the previous year the minimum point to verify. However, in FY2026-H1, Q2 alone generated approximately ¥29,104 million in sales, calculated as the difference from cumulative interim sales, and approximately ¥928 million in operating profit. It will therefore be important to determine whether Q2 can again add at least a similar level of profit.

In Q1, the company revised its full-year forecasts based on recent performance trends, indicating sales of ¥125,000 million, operating profit of ¥3,500 million, ordinary profit of ¥3,500 million and net profit of ¥2,500 million. However, the forecasts before the revision and the amount of the revision were not disclosed, so the extent to which the upward revision incorporated expectations cannot be verified. The amounts still required to reach the full-year forecasts after Q1 are ¥97,396 million in sales and ¥2,844 million in operating profit. The H1 results should show whether these remaining requirements appear realistic.

By segment in Q1, electrical-related sales were ¥8,552 million and segment profit was ¥407 million; construction and energy-related sales were ¥13,785 million and segment profit was ¥162 million; and marine-related sales were ¥4,270 million and segment profit was ¥213 million. Machinery-related sales were ¥996 million, with a segment loss of ¥130 million. In the H1 results, segment profit figures should show whether demand for generative AI and laser processing machines in the electrical-related business, shipments for Hokkaido Shinkansen construction in the construction and energy-related business, and fuel, steel and ferry cargo in the marine-related business continued into Q2.