Q1’s strong progress puts the sustainability of the ¥380 billion full-year forecast to the test

Q1 FY2027 ordinary income was ¥786.388 billion, ordinary profit was ¥173.469 billion, and quarterly net income attributable to owners of the parent was ¥142.223 billion. Net income rose 56.6% year on year and ordinary profit rose 108.5%, indicating a very strong start on the surface. Dividing net income of ¥142.223 billion by the ¥380 billion full-year forecast gives a simple progress rate of 37.4%.

The company identified increases in fund-related income, fee-related income, trading income, gains and losses related to securities, and equity-method investment gains as factors behind the profit growth. Other operating income and expenses also increased, however, so it will be necessary to determine through the first half whether the boost from higher interest rates and market conditions is being replaced to what extent by recurring customer-based and fee income.

This disclosure did not provide full-year forecasts corresponding to sales and operating profit at a general company, and only gave a full-year net income forecast of ¥380 billion. Accordingly, the 37.4% profit progress rate alone cannot be used to determine whether the full-year plan will be exceeded. The full-year outlook for ordinary income and ordinary profit must be reviewed, as must the extent to which temporary securities- and market-related gains and losses are included among the factors behind Q1’s profit growth.

At the next earnings release, we will check how much first-half net income has accumulated against the full-year forecast, whether the forecast has been maintained, and whether profit growth has spread beyond fund-related gains and losses to fee-related income. In particular, if first-half progress against the full-year forecast is well below the simple 50% benchmark, reliance on market gains and losses and extraordinary gains and losses in the second half will again become an issue.