Can the return to profitability in Q1 be repeated in FY2027-H1?

Revenue in FY2027-Q1 was ¥626 million, up 203.9% year on year. Operating income was ¥330 million, ordinary income was ¥383 million, and net income attributable to owners of the parent was ¥341 million. All three profit measures turned positive from the prior-year operating loss of ¥143 million, ordinary loss of ¥140 million and net loss of ¥141 million. As a standalone first-quarter result, this represents a clear turnaround from the ¥368 million in revenue and ¥146 million operating loss recorded in the first half of FY2026.

The full-year forecasts are ¥5,000 million in revenue, ¥1,470 million in operating income, ¥1,510 million in ordinary income and ¥1,350 million in net income attributable to owners of the parent. Progress in Q1 was therefore 12.5% for revenue, 22.4% for operating income, 25.4% for ordinary income and 25.3% for net income. Profit progress is close to a simple one-quarter pace, while revenue is well behind, suggesting that high-margin projects may have been recognized ahead of schedule. The next results should be assessed in terms of whether the revenue shortfall narrows on a cumulative Q2 basis or whether the pattern of profits running ahead of revenue continues.

FY2026, the comparison period, produced full-year revenue of only ¥3,007 million and operating income of ¥425 million, both substantially below FY2025 revenue of ¥5,092 million and operating income of ¥977 million. There were 6 real estate asset-liquidation projects in FY2026, but revenue declined because some projects were not commercialized and the handover of contracted projects was delayed into a different period. Accordingly, the ¥626 million recorded in FY2027-Q1 alone is not enough to establish a recovery. It will be necessary to confirm in FY2027-H1 whether handovers of multiple projects are continuing and whether further timing delays have occurred.

In the next results, in addition to cumulative Q2 revenue and operating income, we will look for management's explanation of the likelihood of achieving the full-year forecasts of ¥5,000 million and ¥1,470 million. In particular, it will be important to determine whether the Q1 return to profitability depended on a specific project involving asset-liquidation revenue from a battery storage facility, or resulted from progress in recognizing revenue in both the real estate business and the renewable-energy-related investment business. Any revisions to the full-year forecasts and updates to the dividend forecast will also be important.