First-quarter profit is tracking above the full-year plan, but repeatability in the first half is the next focus

In the first quarter of the fiscal year ending March 2027, revenue was ¥9,073 million, up 15.0% year on year, and operating profit was ¥465 million, up 59.9%. Ordinary profit was ¥523 million and net profit attributable to owners of the parent was ¥350 million, up 64.6% and 86.6%, respectively. Profit growth substantially outpaced revenue growth, indicating that profit progress was ahead of revenue progress at the start of the fiscal year.

The full-year forecasts are revenue of ¥33,500 million, operating profit of ¥1,400 million, ordinary profit of ¥1,480 million and net profit attributable to owners of the parent of ¥900 million. Calculated mechanically, first-quarter progress was 27.1% for revenue, 33.2% for operating profit, 35.3% for ordinary profit and 38.9% for net profit. The amounts still required to achieve the full-year forecasts are ¥24,427 million of revenue and ¥935 million of operating profit. Rather than simply extrapolating the first-quarter profit trend, the key issue is how much will be accumulated by the end of the first half.

The company cited higher sales prices linked to LP gas procurement prices, increased sales in the housing equipment division, growth in home medical equipment rentals, and increased sales in the industrial gas and equipment division as factors behind the revenue growth. However, it has not disclosed the profit contribution of individual factors such as higher sales prices, volume growth, product mix and lower selling, general and administrative expenses. It will therefore be necessary to use first-half results by segment and the explanation of contributing factors to determine whether the 59.9% increase in first-quarter operating profit was driven by temporary price factors or represents sustainable improvement supported by sales volume and cost management.

At the first-half results, ¥16,750 million of revenue and ¥700 million of operating profit will serve as mechanical reference points equivalent to 50% of the full-year forecasts, although the assessment will take actual seasonality into account. In particular, it will be necessary to confirm whether operating profit progress continues to exceed revenue progress, and whether the company maintains, raises or lowers its full-year forecasts of ¥33,500 million in revenue and ¥1,400 million in operating profit.