FY2027-Q1 earnings are tracking at a high level, but sustainability will be tested in FY2027-H1

Quarterly profit attributable to owners of the parent was ¥328,618 million, or approximately ¥328.6 billion, in FY2027-Q1. The full-year forecast is ¥425,000 million, or ¥425.0 billion, so Q1 alone represents 77.3% of the full-year forecast on a simple calculation. The profit required from Q2 through Q4 to meet the forecast is ¥96,382 million, or approximately ¥96.4 billion.

Insurance revenue was ¥1,686,187 million, or approximately ¥1,686.2 billion, up 14.1% year on year, while quarterly profit before tax was ¥440,926 million, or approximately ¥440.9 billion, up 33.4%. Both the top line and profit before tax increased, indicating that the absolute level of Q1 performance was strong. However, financial gains and losses, as well as insurance service gains and losses, fluctuated significantly, so it would not be appropriate to treat Q1 profit as a full-year run rate.

As of Q1, the company had not changed its full-year forecast for profit attributable to owners of the parent from ¥425.0 billion. However, the Q1 materials did not disclose an official progress rate against the full-year forecast or the profit required over the remaining period to achieve the target as of H1. Accordingly, the 77.3% figure is not a progress rate presented by the company, but a reference figure calculated by dividing Q1 actual profit by the full-year forecast.

At the next results announcement, we will review the actual interim profit, as well as the breakdown of insurance service gains and losses and financial gains and losses, which drove the Q1 increase. Even if H1 profit approaches the full-year forecast, the reliability of that forecast will differ depending on whether the increase reflects improved insurance underwriting or investment gains and losses and changes in interest rates and share prices. We will also confirm whether the full-year profit forecast is revised and whether the annual dividend forecast of ¥170 is maintained.