1Q was front-loaded to earnings, but revenue fell short of straight-line progress, with a recovery in the top line to be confirmed in H1

In 1Q of FY2027, revenue was ¥39,597 million, operating profit was ¥996 million, ordinary profit was ¥1,121 million, and net income attributable to owners of the parent was ¥932 million. Year on year, revenue increased 4.8%, operating profit 10.9%, ordinary profit 4.4%, and net income 6.3%, with all consolidated profit items increasing.

The full-year forecasts are revenue of ¥186,000 million, operating profit of ¥3,800 million, ordinary profit of ¥3,800 million, and net income of ¥2,600 million. 1Q progress rates were 21.3% for revenue, 26.2% for operating profit, 29.5% for ordinary profit, and 35.9% for net income. Against the standard 25% progress indicated in the company’s materials, profit items exceeded the benchmark, while revenue fell short by 3.7 percentage points. On a simple 50% H1 basis, cumulative targets through FY2027-H1 would be revenue of ¥93,000 million, operating profit and ordinary profit of ¥1,900 million each, and net income of ¥1,300 million. These are mechanical reference points that do not constitute the company’s formal H1 plan and do not take seasonality into account.

The factors behind profit progress exceeding revenue growth included the reversal of the previous year’s provision for doubtful accounts and improved profitability in Outer and Chemical. Accordingly, in addition to whether revenue approaches a simple 50% in H1, it will be necessary to monitor whether the operating margin falls materially from approximately 2.5% in 1Q and whether profit growth depends on one-off factors.

As of 1Q, there was no revision to the full-year earnings forecast, and the annual dividend forecast remained at ¥106. The company also did not prepare a cash flow statement for 1Q, and operating, investing, and financing cash flows were not disclosed. In FY2027-H1, we will look for a recovery in revenue and monitor profit progress, operating cash flow, working capital, and whether the full-year forecasts are maintained or revised.