FY2027-Q1 revenue rose, but operating profit plunged; assess cost absorption capacity in the first half

FY2027-Q1 revenue was ¥9,099 million, up 4.0% year on year, but operating profit was only ¥69 million, down 68.2% from ¥220 million in the same period of the previous year. The operating margin fell 1.75 percentage points, from approximately 2.51% to 0.76%, resulting in higher revenue but lower profit. Ordinary profit also fell 34.6% year on year to ¥207 million, while net income attributable to owners of the parent fell 23.5% to ¥152 million.

By contrast, FY2026 full-year revenue was ¥38,537 million and operating profit was ¥1,868 million, up 3.9% and 20.2% year on year, respectively. The full-year operating margin had also risen to 4.8%, making FY2027-Q1's 0.76% more than a simple slowdown in growth, with quarterly profitability deteriorating significantly. The company attributed revenue growth to higher revenue from its high-pressure gas transportation and chemical products and container transportation businesses, while citing higher expenses, including personnel expenses, as the reason for the decline in operating profit. However, it has not disclosed the increase by expense category or the contributions from prices and volumes.

By segment, the petroleum transportation business recorded revenue of ¥4,061 million and an operating loss of ¥8 million, while the high-pressure gas transportation business recorded revenue of ¥2,419 million and an operating loss of ¥27 million. The chemical products and container transportation business, in contrast, recorded revenue of ¥2,486 million and segment profit of ¥44 million, while the asset management business recorded revenue of ¥131 million and segment profit of ¥60 million. Since the businesses driving revenue growth differed from those weighing on profit, the first-half results should be assessed not only on a consolidated operating profit basis but also by checking the size of the losses in petroleum transportation and high-pressure gas transportation.

In FY2026-H1, operating profit was ¥630 million and ordinary profit was ¥752 million. For FY2027-H1, the first points to check are whether operating profit falls below ¥630 million and whether the operating margin remains below 1%. It will also be important to see whether the company discloses, to the extent possible, the cumulative first-half amounts for personnel expenses, fuel costs, repair expenses and growth investment-related costs, as well as the increase in revenue from freight-rate revisions. Since driver shortages and wage increases have become structural rather than temporary cost pressures, if the margin does not recover in the first half, the likelihood of achieving the FY2027 full-year forecast will also require cautious assessment.