FY2027 Q1 consumed almost one-quarter of the full-year plan; H1 will test whether the earnings growth pace can be sustained

FY2027 Q1 revenue was ¥18,275 million, operating profit was ¥4,151 million, ordinary profit was ¥4,267 million and net income attributable to owners of the parent was ¥2,871 million. Year on year, revenue increased 2.0%, operating profit 8.3%, ordinary profit 8.9% and net income 17.6%, maintaining the pattern of higher revenue and earnings. The operating margin was 22.7% based on calculation, improving from approximately 21.4% a year earlier, although the ratio was 20.3% for FY2026 as a whole, so it is not yet possible to confirm whether the high Q1 margin will continue throughout the year.

The full-year forecasts are ¥74,200 million in revenue, ¥16,800 million in operating profit, ¥17,000 million in ordinary profit and ¥11,200 million in net income, putting Q1 progress at 24.6%, 24.7%, 25.1% and 25.6%, respectively. Revenue and operating profit progress are broadly in line with the fact that 25% of the fiscal year has elapsed, so the company is neither materially ahead of nor behind plan at this stage. For H1, ¥37.1 billion in revenue and ¥8.4 billion in operating profit can be used as simple 50% benchmarks, but these are mechanical evaluation criteria, not seasonally adjusted targets disclosed by the company.

The company cites the proactive acquisition of waste liquid from new customers and others, and the steady progress of large-scale, high-value-added projects, as factors behind the earnings growth. It also notes higher raw material and labor costs, fewer projects in the Kansai region and the postponement of large tank-cleaning projects. The Q1 materials do not disclose the monetary contribution of each factor, the volume of waste liquid accepted, the number of projects or profit by operating company. The ¥4.151 billion increase in operating profit therefore cannot be quantitatively broken down into the respective contributions of higher volume, project mix, price pass-through and cost controls.

FY2026 revenue was ¥71,845 million and operating profit was ¥14,588 million, so the FY2027 plan calls for revenue growth of 3.2% and operating profit growth of 15.1%. Q1 operating profit growth of 8.3% is below the full-year target growth rate, but this alone does not indicate that the target will be missed. At the next H1 results, it will be necessary to assess not only simple progress rates, but also whether higher raw material and labor costs have again pressured margins, whether postponed projects translated into revenue and profit in Q2, and whether the full-year forecasts have been revised.