Can it absorb the impact of a record profit and maintain FY2027 full-year net profit of ¥160.0 billion?

Profit levels have expanded from net profit attributable to owners of the parent of ¥123.8 billion in FY2024, to ¥135.165 billion in FY2025 and ¥162.206 billion in FY2026. FY2026 exceeded the full-year earnings forecast of ¥160.0 billion by ¥2.206 billion, but the FY2027 forecast is ¥160.0 billion, a plan that does not assume a new record profit. Accordingly, the focus of the next interim results is not simply the year-on-year comparison, but the sustainability of earnings after the company has moved to a higher base year.

In the first quarter of FY2027, revenue of ¥539.102 billion decreased 7.8% year on year, operating profit of ¥47.104 billion fell 42.9%, and net profit attributable to owners of the parent of ¥31.609 billion declined 44.8%. The operating margin fell from approximately 14.1% in the prior-year quarter to approximately 8.7%, below the FY2026 full-year margin of 10.9%. It is too early to judge full-year performance based solely on first-quarter profit, but the extent to which the operating margin recovers by the interim period will be a practical indicator of the credibility of the ¥160.0 billion forecast.

At the next interim results, it will be necessary to check interim net profit as a percentage of the full-year forecast. Simply applying 50% to the full-year forecast gives ¥80.0 billion as a mechanical benchmark, but the company has not disclosed an interim target that reflects seasonality, so this figure should not be treated as a company-plan requirement. Rather, the key question is whether the company can generate a combination of operating profit, ordinary profit and net profit that does not depend on the prior-year earnings benefit from the change in fiscal year-end or on large asset-sale gains.

The company attributed the decline in first-quarter FY2027 profit to the ¥22.8 billion earnings benefit from the change in the fiscal year-end of a consolidated subsidiary in the prior-year quarter falling away, as well as lower asset-sale gains in segments including real estate. The former has been quantified, while the amount of the decline in the latter and the extent of segment-level offsets have not been fully broken down. At the interim results, we will look to confirm whether the company discloses, to the extent possible, ordinary earnings, asset-sale gains, credit-related costs and impairment losses separately, rather than merely repeating the explanation of the same one-off factors.