FY2027 Q1 surged, but uncertainty remains over full-year earnings and dividends

Operating revenue in the first quarter of the fiscal year ending March 2027 was ¥31,570 million, up 64.9% from ¥19,145 million in the same quarter of the previous year. Operating income increased from ¥949 million to ¥10,823 million, ordinary income was ¥11,525 million, and quarterly net income attributable to owners of the parent was ¥8,001 million. Net income increased 365.8% year on year and ordinary income increased 911.5%, showing a recovery in earnings that substantially outpaced operating revenue growth rather than a modest improvement.

On a simple calculation, the operating margin rose from approximately 5.0% in the same quarter of the previous year to approximately 34.3% in the current quarter. The company does not disclose the operating margin; this is an indicative figure calculated from disclosed operating revenue and operating income. Trading gains on Japanese government bonds, which had been losses in the same quarter of the previous year, turned profitable, while equity brokerage fees and investment trust sales also increased. The improvement therefore cannot be explained solely by ordinary fixed-cost reductions.

The full fiscal year ended March 2026 also saw higher revenue and profit, with operating revenue of ¥95,595 million, operating income of ¥18,730 million and net income attributable to owners of the parent of ¥21,360 million. However, the company has consistently explained that the performance of the financial instruments business is heavily affected by market conditions for equities, bonds, interest rates and foreign exchange. A ¥6,450 million gain on the sale of investment securities was also recorded as an extraordinary gain in the fiscal year ended March 2026, so the full-year profit level should not be treated as equivalent to recurring operating earning power without further analysis.

The company has not disclosed full-year forecasts for operating revenue, operating income, ordinary income or net income for the fiscal year ending March 2027, citing market volatility. The annual dividend forecast was also changed from ¥50 to undecided, and the interim and year-end dividends remain undecided. At the next results announcement, we will check not only cumulative second-quarter operating revenue and operating income, but also whether acceptance fees, trading gains and losses, and investment trust sales continue to increase year on year, and whether the previously undisclosed full-year earnings and dividend policies are updated.