FY2027 Q1 broadly in line with the full-year plan, with sustainability of earnings growth to be assessed in H1

FY2027 Q1 revenue was ¥11,440 million, operating profit was ¥2,914 million, ordinary profit was ¥3,424 million and net profit attributable to owners of the parent was ¥2,397 million. These figures represented year-on-year increases of 16.8%, 19.0%, 21.8% and 22.1%, respectively, with both revenue and profit increasing. The company said it pursued community-based sales, new customer development and expansion of high-value-added products, supported by increased domestic new-vehicle sales.

Q1 progress against the full-year forecasts was 22.9% for revenue, 23.5% for operating profit, 24.8% for ordinary profit and 25.2% for net profit. If 50% is used mechanically as an H1 benchmark without accounting for quarterly seasonality, the cumulative H1 confirmation levels would be revenue of ¥25,000 million, operating profit of ¥6,200 million, ordinary profit of ¥6,900 million and net profit of ¥4,750 million. However, this 50% is not an H1 forecast provided by the company, but a progress benchmark calculated mechanically from the full-year plan, and actual performance needs to be assessed against the seasonality of the same period last year.

Q1 operating margin was approximately 25.5%, calculated as ¥2,914 million divided by ¥11,440 million, compared with approximately 25.0% in the same quarter of the previous year, calculated as ¥2,449 million divided by ¥9,795 million, an improvement of approximately 0.5 percentage points. By contrast, the FY2026 full-year operating margin was 24.4%, so it is still too early to conclude that an improvement in full-year profitability has taken hold based on Q1 alone. The key question in H1 will be whether the Q1 margin can be confirmed as a sustained improvement driven by increased domestic sales, new customer development and expansion of high-value-added products, rather than a temporary factor.

The FY2027 full-year forecasts are revenue of ¥50,000 million, operating profit of ¥12,400 million, ordinary profit of ¥13,800 million and net profit of ¥9,500 million, and had not been revised as of the Q1 results. At the H1 results, in addition to whether these forecasts are maintained, we will assess whether revenue growth has reverted to exceeding operating profit growth and whether the margin has fallen below the approximately 24.8% required under the full-year plan. The Q1 earnings summary did not disclose segment-level forecasts as of H1, year-on-year comparisons by region or a detailed profit bridge for cost of sales and selling, general and administrative expenses.