Q1 led on operating profit, while the full-year plan calls for higher revenue but broadly flat profit

In FY2027-Q1, operating revenue was ¥10,142 million, up 6.6% year on year, operating profit was ¥1,637 million, up 22.6%, and ordinary profit was ¥1,747 million, up 23.9%. The operating margin was 16.1%, approximately 2.1 percentage points higher than the approximately 14.0% recorded in the same quarter of the previous fiscal year. Operating revenue progress was 23.2% against the full-year forecast of ¥43,738 million, while operating profit had reached 36.6% of the full-year forecast of ¥4,477 million, indicating that profit is ramping up faster than revenue.

However, FY2026 operating revenue was ¥40,132 million and operating profit was ¥4,478 million, compared with the FY2027 company forecasts of ¥43,738 million and ¥4,477 million, respectively. In other words, revenue is expected to increase 9.0%, while operating profit is expected to remain almost flat year on year, with the full-year operating margin planned to decline from 11.2% to approximately 10.2%. The high Q1 margin does not necessarily translate into full-year profit growth.

The FY2027 ordinary profit forecast is ¥4,397 million, down 4.9% year on year, while the forecast for net income attributable to owners of the parent is ¥3,006 million, down 25.7%. In FY2026, a gain of ¥1,071 million from the revision of the retirement benefit plan was recorded as extraordinary income, making the decline in net income a temporary effect. Accordingly, the next results announcement should distinguish between operating earning power and the ordinary level of profit excluding extraordinary income.

Although operating profit in the transportation business declined in Q1, real estate and other businesses pushed up profit, making it important to see whether the same composition continues through the first half. In FY2027-H1, we will check whether operating revenue exceeds approximately ¥10,935 million, equivalent to 25% of the full-year forecast, and whether operating profit reaches approximately ¥2,239 million, equivalent to 50% of the full-year forecast. In addition, whether the company maintains its full-year forecast or revises it to reflect higher transportation costs will affect the assessment of the results.