Q1 delivered consolidated revenue and earnings growth, but lower construction equipment earnings were offset by the trading and real estate businesses

For the first quarter of the fiscal year ending February 2027, consolidated revenue was ¥24.617 billion, up 6.5% year on year, operating profit was ¥1.810 billion, up 10.9%, and ordinary profit was ¥1.804 billion, up 10.2%. By contrast, quarterly net profit attributable to owners of the parent was ¥1.096 billion, down 5.5%, meaning that the improvement at the operating level did not flow through directly to bottom-line profit. In FY2027-H1, it will be necessary to determine whether the increase in operating profit is continuing after excluding one-off factors.

By segment, the construction equipment business recorded revenue of ¥19.148 billion and segment profit of ¥880 million. Revenue increased 2.4%, but profit declined 15.2%. The trading business recorded revenue of ¥4.007 billion and profit of ¥274 million, up 37.1% and 23.6%, respectively. The real estate business recorded revenue of ¥1.460 billion and profit of ¥570 million. Revenue declined 1.0%, but profit increased 7.8%. Consolidated earnings growth resulted from higher earnings in the trading and real estate businesses offsetting weaker profitability in construction equipment, making it difficult to characterize the improvement as broad-based across the company.

The latest disclosure provided segment revenue and profit, but did not disclose numerical operating KPIs such as rental utilization rates, sales volumes, rental unit prices, regional revenue, orders received or order backlog. In FY2027-H1, we will assess, alongside the amounts for each segment, whether the construction equipment business's profit margin improves from approximately 4.6% in Q1, whether the benefits of the trading business's newly consolidated operations continue, and whether the hotel and rental divisions of the real estate business can continue to absorb the decline in construction equipment earnings.