Nomura Micro Q1 FY2027: Revenue Drops 26% but Orders Soar 783%, Outlook Steady

Revenue fell 25.8% year-on-year to ¥9.20 billion, while operating profit slumped 54.4% to ¥628 million. Ordinary profit declined 56.2% to ¥342 million and net profit attributable to owners of the parent decreased 48.4% to ¥239 million.

In contrast, orders surged 783.4% to ¥38.89 billion as the company secured multiple large-scale water treatment projects, especially in Japan and East Asia, and semiconductor-related capital expenditure demand remained firm. The combination of larger and more numerous orders produced an unprecedented order intake level.

The gross profit margin improved to 23.3% (from 22.4% a year earlier) thanks to a higher mix of maintenance and consumables sales, but gross profit still fell 22.8% to ¥2.15 billion due to the overall revenue decline. Selling, general and administrative expenses rose 8.2% to ¥1.52 billion, driven by higher personnel costs, further pressuring operating profit.

Regional performance was sharply contrasting, with a steep decline in Japan offsetting strong gains in Taiwan and South Korea.

Japan (42% of total sales) saw revenue plunge 47.8% to ¥3.89 billion and operating profit drop 48.1% to ¥396 million, as the previous year’s large water treatment project rolled off and new large orders will be recognised in the second half or later.

South Korea revenue soared 124.7% to ¥1.37 billion on progress of a large water treatment plant order, but operating profit tumbled 67.6% to just ¥20 million due to cost overruns on certain projects.

China posted a 4.2% revenue rise to ¥1.03 billion, supported by steady maintenance and consumables, yet swung to an operating loss of ¥25 million (vs. a ¥9 million profit a year ago) as costs and SG&A rose.

Taiwan delivered revenue up 168.4% to ¥1.73 billion and operating profit up 0.5% to ¥189 million, driven by smooth execution of a large prior-year order and strong maintenance sales.

United States revenue dropped 58.1% to ¥1.12 billion and operating profit fell 88.9% to ¥40 million as large projects wound down.

Other (including Singapore) revenue surged 617.5% to ¥48 million, swinging from a ¥3 million loss to an operating profit of ¥8 million as local operations gained traction.

Total assets at end-June stood at ¥111.08 billion, up ¥787 million from the previous fiscal year-end. Notes and accounts receivable and contract assets increased ¥2.20 billion, while short-term borrowings rose ¥3.48 billion and cash and deposits fell ¥1.95 billion. Liabilities grew ¥2.10 billion to ¥72.54 billion, and net assets declined ¥1.31 billion to ¥38.54 billion, with the equity ratio easing to 33.9% (from 35.6%).

The company has not prepared quarterly cash flow statements, but the figures suggest higher working capital needs are being met through increased borrowings.

The dividend forecast was held steady at ¥30 for the interim and ¥55 for the year-end, for an annual ¥85 per share, up from ¥81 in the previous year. As a subsequent event, in July 2026 the board resolved to issue stock options (254,500 subscription rights) to strengthen medium- to long-term incentives for executive officers and employees.

External risks cited by the company include Middle East tensions affecting energy prices and logistics, uncertainty over US trade and tariff policies, and a sluggish Chinese economy. While AI-related semiconductor investment remains robust, geopolitical tensions and economic fluctuations could weigh on capital spending plans.

On the business front, the high reliance on large water treatment projects, which have long lead times from order to revenue recognition, means that project execution and cost control skills cause large swings in earnings. The Q1 order surge is positive, but converting it reliably into profit will test the company’s project management capabilities.

The company left its full-year forecast unchanged, calling for revenue of ¥97.0 billion (up 72.5% year-on-year), operating profit of ¥16.0 billion (up 140.0%), ordinary profit of ¥15.0 billion (up 166.5%), and net profit of ¥11.1 billion (up 190.7%).

Q1 progress rates of 9.5% for revenue and 3.9% for operating profit are low but consistent with the typical back-end loaded pattern and the order surge. As long as the semiconductor equipment market continues to expand, the full-year targets appear well supported, though currency and geopolitical risks could pose downside.