Can the high first-quarter earnings progress be sustained in FY2027-H1?

First-quarter revenue for the fiscal year ending March 2027 was ¥32,145 million, up 2.0% year on year, operating profit was ¥2,907 million, up 11.4%, ordinary profit was ¥3,012 million, up 10.6%, and net profit attributable to owners of the parent was ¥1,706 million, up 11.6%. Revenue growth was modest, but operating profit grew faster than revenue, resulting in an operating margin of approximately 9.0%. The focus of the first-half results will be whether this margin improvement is temporary or continuing as a result of fare revisions and changes in the business mix.

The cumulative second-quarter forecast is revenue of ¥64,700 million, operating profit of ¥4,650 million, ordinary profit of ¥4,480 million and net profit of ¥2,350 million. Based on first-quarter results, the first-half forecast would be achieved if second-quarter revenue reaches ¥32,555 million and operating profit reaches ¥1,743 million. First-quarter revenue represented 49.7% of the first-half revenue forecast, while operating profit reached 62.5%, indicating strong earnings progress. However, as earnings may be weighted toward the first quarter, if standalone second-quarter operating profit falls below ¥1,743 million, the margin for achieving the first-half forecast will narrow rapidly.

The full-year forecast is revenue of ¥129,700 million, operating profit of ¥6,200 million, ordinary profit of ¥5,630 million and net profit of ¥3,730 million. Compared with the previous fiscal year, this represents planned growth of 2.3% in revenue, a 8.5% decline in operating profit, a 15.5% decline in ordinary profit and 3.0% growth in net profit. Based on the first-half forecast alone, the company plans to generate 75.0% of full-year operating profit in the first half. The second-quarter results should clarify whether the full-year forecast will be maintained and whether the assumptions for second-half demand, labor costs and depreciation will change.

As of the first quarter, an upward revision to the cumulative second-quarter forecast had been disclosed, but the figures before the revision and the amount of the revision had not been disclosed. To assess the actual scale of the upward revision, the next results should be checked for the difference between the old and new forecasts and whether the revision reflects sustained improvement in the passenger vehicle business or other temporary factors.