EXEO Group Q1 Operating Profit Nearly Doubles as Two Near-Breakeven Segments Turn Profitable

The whole improvement came from the two smaller segments

EXEO Group, Inc. (TSE: 1951) published consolidated results for the three months to June 30, 2026 on August 7, 2026 under Japanese GAAP. Net sales rose 12.4% to ¥155,722 million, operating profit 89.4% to ¥10,690 million, ordinary profit 96.9% to ¥11,317 million and net profit attributable to owners of the parent 88.1% to ¥6,907 million, for earnings per share of ¥33.91 against ¥17.82.

The segment table makes the arithmetic unusually clear. Telecom Infrastructure, the largest at ¥60,122 million of revenue, grew 4.1% with segment profit up 10.7% to ¥5,837 million — a steady, unremarkable quarter. Social Infrastructure lifted revenue 19.7% to ¥49,188 million and profit from ¥178 million to ¥2,677 million, and System Solutions revenue 16.8% to ¥46,411 million and profit from ¥190 million to ¥2,174 million.

Between them those two segments added ¥4,483 million of profit against a group increase of ¥5,046 million — roughly 89% of it. A year ago they were, in profit terms, doing almost nothing: ¥368 million combined on ¥80,817 million of revenue, a margin of 0.5%. This quarter they earned 5.1% on ¥95,599 million.

A reorganisation that makes the comparison honest

The group revised its segments this quarter as part of its medium-term plan, to strengthen segment-level management and clarify the business split internally and externally. The Global unit previously sitting inside System Solutions was reallocated across the segments according to the nature of each project, so that each can run its domestic and overseas work as one; some telecom-related work previously inside Urban Infrastructure moved to the telecom-carrier business; and the two segments were renamed Telecom Infrastructure and Social Infrastructure. Prior-year segment figures have been restated on the new basis, so the swings above are like-for-like.

A balance sheet that shrank while equity held

Total assets fell 9.4% from the March year-end to ¥625,986 million while net assets were near-flat at ¥347,938 million, so the equity ratio rose sharply to 54.8% from 49.5%. Net assets per share were ¥1,687.55 against ¥1,676.23. Comprehensive income was ¥10,469 million (+319.7%), well above the ¥6,907 million that reached the bottom line.

Guidance unchanged, and it forecasts falling revenue

Guidance for FY3/2027 is unchanged: net sales of ¥750,000 million (−4.8%), operating profit of ¥56,000 million (+7.7%), ordinary profit of ¥54,500 million (+3.4%) and net profit of ¥35,500 million (+14.4%), for earnings per share of ¥174.82.

Note the direction: the company expects revenue to fall for the year while profit rises — the opposite of the quarter just reported, in which revenue grew 12.4%. The quarter has already delivered 19.1% of the full-year operating-profit target, which for a contractor front-loading its first quarter is a solid start. The annual dividend forecast rises to ¥80.00 per share from ¥68.00, split ¥40.00 interim and ¥40.00 year-end — a 17.6% increase, the largest proportional move on the page.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.