FY2027 Q1 saw lower revenue and profit, increasing reliance on the second half to achieve the full-year plan

Consolidated revenue for FY2027 Q1 was ¥13,632 million, operating profit was ¥717 million, ordinary profit was ¥536 million, and net profit attributable to owners of the parent was ¥310 million. Year on year, revenue fell 5.3%, operating profit fell 6.0%, ordinary profit fell 17.2%, and net profit fell 29.4%. The decline widened from the operating level to the ordinary-profit level and below, including the impact of higher interest expenses. The full-year forecasts remain unchanged at revenue of ¥88,000 million, operating profit of ¥6,000 million, ordinary profit of ¥5,000 million, and net profit of ¥3,500 million.

On a simple quarterly-progress basis, revenue represented 15.5% of the full-year plan and operating profit 12.0%. However, the company is seasonal, with deliveries of condominiums for sale and completed construction projects concentrated at the end of the fiscal year, so it is too early to conclude that the full-year targets will be missed based solely on the low first-quarter progress. At the next interim results, it will be necessary to assess, against FY2026 first-half revenue of ¥35,985 million and operating profit of ¥3,081 million, whether FY2027 first-half revenue and operating profit return to the prior-year levels and whether the first-quarter decline in revenue and profit remains only a temporary timing gap.

In the prior fiscal year, revenue was ¥87,815 million and operating profit was ¥6,678 million, with operating profit exceeding the ¥5,000 million final-year target of the medium-term management plan one year ahead of schedule. At the results briefing, the company explained that projects carried over from the prior year were recorded in the current year and lifted profit above normal levels. Accordingly, it expects operating profit to decline to ¥6,000 million in the fiscal year ending March 2027 as that benefit reverses. At the next results announcement, it will be important to provide specific details on the timing of revenue recognition for carried-over projects, deliveries of condominiums and construction projects scheduled for the second half, and the feasibility of securing the remaining ¥5,283 million of profit required to meet the full-year plan.