Revenue is on plan, but operating profit is projected to decline, making the quality of the second quarter the key focus

In FY2027-Q1, revenue was ¥2,274 million, up 1.0% year on year; operating profit was ¥56 million, down 2.6%; ordinary profit was ¥87 million, up 0.8%; and net profit attributable to owners of the parent was ¥35 million, down 39.3%. Revenue reached approximately 25.1% of the ¥9,061 million full-year forecast, almost exactly matching the mechanical 25% progress expected after three months. Operating profit, meanwhile, reached approximately 38.4% of the ¥146 million full-year forecast, but declined year on year, indicating that revenue growth is not translating directly into earnings.

The company’s FY2027 full-year forecasts are revenue of ¥9,061 million, operating profit of ¥146 million, ordinary profit of ¥176 million and net profit attributable to owners of the parent of ¥108 million. Revenue is expected to rise 4.1% from the FY2026 result of ¥8,702 million, while operating profit is planned to decline 10.7% from ¥164 million to ¥146 million, ordinary profit 27.8% from ¥244 million to ¥176 million, and net profit 37.2% from ¥173 million to ¥108 million. The operating margin is also expected to fall from approximately 1.9% in FY2026 to approximately 1.6% on a forecast basis.

In FY2027-Q1, price revisions in the domestic transportation business, new projects, spot deliveries and sales of reconditioned drums and pails supported revenue growth, while higher vehicle repair costs weighed on operating profit. In addition, higher income taxes related to the sale of shares in an affiliate reduced net profit to ¥35 million. Accordingly, in FY2027-H1 it will be necessary to assess not only revenue progress but also whether higher unit prices from price revisions can absorb rising costs such as vehicle repairs, fuel and labor, and maintain or improve the operating margin.

As of FY2027-Q1, there was no revision to the full-year earnings forecast, and the annual dividend forecast was maintained at ¥12. At the next results announcement, the mechanical check will be whether revenue of ¥4,531 million and operating profit of ¥73 million, the 50% progress benchmarks, are exceeded. It will also be necessary to assess how much fuel surcharges, freight-rate revisions and normalization of repair costs are incorporated into the ¥146 million full-year operating profit assumption. Even if revenue remains on plan, continued operating margins below the approximately 1.9% achieved in FY2026 would warrant a cautious view of the likelihood of meeting the full-year forecast.