Q1 revenue rose, but directors’ retirement benefits led to an operating loss and a net loss

FY2027-Q1 operating revenue was ¥4,950 million, up 6.4% year on year. Higher transport volumes for agricultural machinery and other goods in the transport business, as well as increases in new-car sales and direct used-car sales in the passenger vehicle sales business, contributed to higher revenue, but operating income was a ¥23 million loss. The operating margin fell from approximately 3.5% in the same period of the previous year to approximately negative 0.5%, indicating that higher revenue did not translate directly into profit.

The company disclosed that ¥157 million, representing the difference from the directors’ retirement benefit provision, was recorded in selling, general and administrative expenses in connection with the resolution to pay directors’ retirement benefits to retiring directors. In addition, ¥257.6 million in directors’ retirement benefits was recorded as an extraordinary loss. As a result, ordinary income remained profitable at ¥78 million, but net income attributable to owners of the parent was a ¥284 million loss.

The disclosed profit and loss items related to directors’ retirement benefits comprise the ¥157 million difference in selling, general and administrative expenses and the ¥257.6 million extraordinary loss. Their simple total is ¥414.6 million, but the accounting relationship between the two and whether they overlap cannot be confirmed from this results summary alone. The next results should clarify the expense breakdown and how these items are treated as one-off expenses.

The impact of one-off expenses was significant in FY2027-Q1, making it difficult to assess normal earnings power from operating income alone. In FY2027-H1, we will check whether operating income returns to at least profitability, whether any additional directors’ retirement benefits are recorded, and whether the core operating margin recovers toward the full-year operating profit forecast of ¥720 million.