FY2027 H1 is on track for record earnings, but exposure to market conditions is the next focus

In the first quarter of the fiscal year ending March 2027, operating revenue was ¥9,496 million, operating profit was ¥4,369 million, ordinary profit was ¥4,687 million, and net income attributable to owners of the parent was ¥3,398 million. Year on year, operating revenue increased 40.5%, operating profit 81.3%, ordinary profit 74.0%, and net income 55.5%. The operating margin rose 10.4 percentage points, from approximately 35.6% to approximately 46.0%. The improvement in first-quarter margins reflects not only favourable market conditions but also the fact that growth in revenue items exceeded the increase in expenses.

By segment, revenue was ¥6 million for 岩井コスモホールディングス株式会社 and ¥9,483 million for 岩井コスモ証券株式会社. Segment profit was ¥4,018 million for the holding company and ¥4,459 million for the securities company, with most revenue generated by the securities subsidiary. Segment profit cannot simply be added to consolidated operating profit because it includes intersegment eliminations and other adjustments. At the next results announcement, it will be important to confirm how much of the securities business’s earnings growth flowed through to consolidated profit, including intersegment transactions and eliminations.

Among the revenue items, brokerage commissions were ¥2,113 million, up 88.6% year on year, while trading gains and losses on stocks and other securities were ¥5,291 million, up 32.6%. The company attributed the increase in revenue to active domestic and overseas equity markets, proposal-based sales of US equities, and expanded investment trust offerings, but had not broken down the contribution of market factors and individual sales initiatives as of Q1. If the rise in share prices and trading activity moderates, it will be important to determine whether US equity sales and growth in investment trust assets can continue to support revenue.

The first-half forecast announced on 16 October calls for operating revenue of ¥18,141 million, operating profit of ¥7,906 million, ordinary profit of ¥8,237 million, and net income of ¥6,320 million. A simple calculation of the difference from Q1 actual results implies that Q2 alone would need to generate operating revenue of ¥8,645 million, operating profit of ¥3,537 million, ordinary profit of ¥3,550 million, and net income of ¥2,922 million. At the next results announcement, it will be necessary to assess not only whether the first-half forecast was achieved, but also whether Q2 profit was driven by trading to the same extent as Q1 or broadened into relatively recurring income such as brokerage commissions and investment trust fees.