Q1 delivered higher revenue but lower profit; the focus for FY2027-H1 is whether revenue growth can be converted into profit

FY2027-Q1 operating revenue was ¥4,242 million, up 4.3% from approximately ¥4,067 million a year earlier. However, operating profit declined 9.7% to ¥53 million from ¥58 million. The operating margin, calculated simply as operating profit divided by operating revenue, was approximately 1.25%, down approximately 0.18 percentage points from approximately 1.43% a year earlier. While revenue has been maintained and expanded, the key change in this quarter was the reduction in profit generated per yen of revenue.

At the earnings level, ordinary profit was ¥214 million, down 21.1% year on year, while profit attributable to owners of the parent was ¥155 million, down 23.4%. The company cited wage increases and higher depreciation as factors behind the decline in operating profit, and lower interest and dividend income and lower equity-method investment gains as factors behind the decline in ordinary profit. Accordingly, personnel expenses and depreciation should be monitored separately at the operating level, as should changes in investment income below operating profit.

By business, operating revenue from Export was ¥691.755 million and that from International was ¥2,172.912 million, both above the year-earlier levels, while Export recorded a segment loss of ¥15.457 million. International secured segment profit of ¥31.689 million, and Warehouse maintained profit of ¥12.948 million. However, revenue growth concentrated in some divisions will not by itself lead to a recovery in company-wide operating profit. Next time, we will assess whether the Export deficit stems from freight rates, charges or the business mix, and how much can be absorbed by profit from International and Warehouse.

The FY2027 full-year operating profit forecast is ¥350 million, representing an expected 48.6% increase from FY2026 actual operating profit of ¥235 million. Q1 contributed ¥53 million, or only 15.1%, so progress is behind schedule on a simple even-quarter basis. Since seasonality has not been quantitatively disclosed in the current materials, we will track cumulative first-half operating profit against ¥175 million, a mechanical first-half benchmark equivalent to 50% of the full-year forecast.