Q1 delivered higher revenue and profit, but earnings progress against the full-year plan is low, making acceleration in H1 the focus

FY2027 Q1 revenue was ¥6,245 million, up ¥571 million, or 10.1%, from ¥5,674 million in the same period of the previous year. Operating profit was ¥82 million, up ¥41 million from ¥41 million a year earlier, representing a 96.5% increase. Ordinary profit also increased to ¥49 million from ¥14 million in the same period of the previous year, while profit attributable to owners of the parent turned from a ¥34 million loss in the same period of the previous year to a profit of ¥8 million.

However, progress against the full-year plan remains weak on the profit side. Revenue progress was 22.7%, calculated as ¥6,245 million divided by ¥27,500 million, while operating profit was only 6.3%, calculated as ¥82 million divided by ¥1,300 million. Compared mechanically with the 25% of the year that has elapsed, revenue is broadly in line, while operating profit is well below that level. The Q1 operating margin was 1.31% on a calculated basis, indicating that profit accumulation remains limited relative to revenue growth.

As of Q1, the company had not disclosed specific H1 forecasts for revenue or operating profit, providing only its full-year plan. If half of the full-year plan is used as a mechanical benchmark for H1, revenue would be ¥13,750 million and operating profit ¥650 million. After deducting Q1 actual results, Q2 alone would need to generate revenue of ¥7,505 million and operating profit of ¥568 million. These are not the company's published H1 forecasts, but benchmark figures for analysis based on simply dividing the full-year plan in half.

At the next earnings release, the focus will be not only on whether revenue growth continues in Q2, but also on whether the operating margin improves from 1.31%. Maintaining full-year operating profit of ¥1,300 million requires avoiding excessive concentration of profit in the second half. If H1 operating profit falls materially below ¥650 million, key issues will include when expanded sales activities translate into profit, the impact of bullion prices on costs, and whether the assumptions underlying the full-year plan need to be reviewed.