The key FY2027-H1 focus is moving away from a structure in which profit disappears despite higher revenue.

FY2027-Q1 revenue was ¥14,159 million, up 9.0% from ¥12,996 million in the same quarter of the previous year. However, operating profit fell 95.7% from ¥744 million to ¥32 million, and the operating margin declined from approximately 5.7% to approximately 0.2%. The expansion in revenue did not translate into higher profit, and the next interim results will need to determine whether this gap reflects temporary start-up costs or a structural decline in profitability.

The company cited expenses for considering new businesses, upfront investment for the opening of OBL in the US, lower unit prices following revisions to medical fees, initial costs and depreciation associated with new openings, higher personnel and recruitment costs, and higher financial expenses due to increased borrowings as factors behind the decline in profit. First-quarter depreciation was ¥1,371 million, while profit before tax was negative ¥192 million and quarterly profit attributable to owners of the parent was negative ¥281 million. In FY2027-H1, the increase in each cost factor and whether it is temporary or ongoing should be confirmed. The earnings summary did not provide a sufficient bridge by expense item or the specific amount of financial expenses.

For FY2026, revenue was ¥54,353 million, operating profit was ¥5,783 million and the operating margin was 10.6%. The FY2027 full-year forecasts are revenue of ¥64,600 million and operating profit of ¥3,800 million, assuming revenue growth of 18.9% but a 34.3% decline in operating profit. In other words, the company’s own plan incorporates a combination of higher revenue and lower profit. In FY2027-H1, the key issue is not simply whether revenue exceeds the previous year’s level, but how far profitability deviates from the 10.6% achieved in FY2026 and which costs will remain in the second half.

First-quarter progress against the ¥3,800 million operating profit forecast was only 0.8%. This is far below the simple benchmark of ¥1,900 million for even progress through the first half, making it important to see whether the company’s stated gradual improvement from the second quarter onward appears in the results. We will track whether FY2027-H1 not only remains profitable, but also demonstrates the pace of improvement needed to achieve the full-year forecast, and whether the full-year forecast or cost assumptions are revised.