FY2027 Q1: operating profit rebounded sharply despite lower revenue, putting profit progress ahead of the full-year plan

Consolidated revenue for FY2027 Q1 was ¥144,578 million, down 6.1% year on year. Operating profit was ¥3,465 million, up 239.4%, ordinary profit was ¥3,858 million, up 186.9%, and net income attributable to owners of the parent was ¥2,667 million, up 148.6%. Although revenue declined, operating profit increased by ¥2,444 million from ¥1,021 million in the year-earlier quarter, indicating that the fading impact of low-margin transactions and improved margins across the businesses lifted company-wide earnings.

The operating margin improved by approximately 1.7 percentage points, from approximately 0.7% in the year-earlier quarter to approximately 2.4% in Q1. The full-year forecasts are ¥620,000 million in revenue, ¥12,000 million in operating profit, ¥13,000 million in ordinary profit and ¥8,200 million in net income attributable to owners of the parent, putting simple Q1 progress at 23.3%, 28.9%, 29.7% and 32.5%, respectively. It is positive that profit progress is ahead of revenue, but the company’s businesses are affected by seasonality and market fluctuations, including petroleum product prices, air travel demand and winter gas demand. Q1 progress therefore cannot be treated as a direct indication of full-year achievement.

In FY2026, revenue was ¥611,570 million and operating profit was ¥12,356 million, meaning operating profit increased despite lower revenue. The current-year operating profit forecast of ¥12,000 million is 2.9% below the prior-year result, and the sharp Q1 recovery also reflects the low base in the year-earlier quarter. Accordingly, at the next results announcement it will be necessary to assess separately whether the petroleum-related business remains profitable, whether profit growth in aviation, chemicals and gas continues, and whether the impact of selling, general and administrative expenses or inventory valuation recurs, rather than looking only at the year-on-year profit growth rate.

At the first-half results, we intend to track whether revenue exceeds ¥310,000 million, operating profit exceeds ¥6,000 million and net income exceeds ¥4,100 million as simple progress benchmarks. These are not first-half targets set by the company, but comparison thresholds obtained by mechanically halving the full-year forecasts. The latest disclosure does not break down sales volumes, product-by-product price spreads or profit contributions by factor, making it important to assess the reproducibility of the profit recovery and whether the full-year forecasts are revised at the first-half results.