How much of the delay in condominium handovers can be recovered in the first half

Consolidated revenue for April to June 2026 was ¥6,326 million, down 39.6% from ¥10,475 million in the same period a year earlier. Operating results deteriorated from a ¥79 million profit in the previous year to a ¥937 million loss, while ordinary loss was ¥993 million and quarterly net loss attributable to owners of the parent was ¥681 million. The company explained that, while newly completed condominium properties were handed over in the same period a year earlier for the first time in six years, there were no handovers of such properties in the current quarter, and revenue recognition is expected to be concentrated in the fourth quarter.

The full-year forecasts were left unchanged at revenue of ¥58,000 million and operating profit of ¥2,300 million. First-quarter revenue reached only 10.9% of the full-year forecast, while operating results were a ¥937 million loss, indicating a significant shortfall on a simple progress basis. To meet the full-year forecasts, the company would need to generate revenue of ¥51,674 million and operating profit of ¥3,237 million over the remaining three quarters. Assuming the second- and fourth-quarter concentration described by the company, this does not immediately imply a revision to the forecasts, but if recovery in the second quarter is weak, dependence on the fourth quarter will increase further.

For comparison, revenue in the first half of FY2026 was ¥19,080 million and operating results were a ¥52 million loss. Even merely bringing first-half FY2027 revenue back to the previous interim-period level would require standalone second-quarter revenue of approximately ¥12,754 million based on the first-quarter results. If ¥29,000 million, half of the full-year revenue forecast, were generated in the first half, standalone second-quarter revenue would need to be approximately ¥22,674 million. These are only mathematical benchmarks that ignore seasonality and do not indicate that the company expects revenue to be recognized evenly across the first half.

At the next results announcement, we will want to confirm not only cumulative second-quarter revenue and operating results, but also the number of units handed over, revenue recognized and contribution to profit from newly completed condominium properties. The first-quarter disclosure did not provide a bridge breaking down the impact of handover timing into volume, value and profit margin. Even if revenue recovers in the second quarter, achievement of the ¥2,300 million full-year operating profit forecast will not become more likely if the profitability of the properties handed over is low. The extent of operating profit recovery therefore needs to be assessed alongside the revenue recovery.