The full-year forecast after the upward revision should be assessed based on first-half profit progress, excluding special factors.

First-quarter revenue was ¥1,408,385 million and operating income was ¥130,644 million, up 9.0% and 10.6%, respectively, from the year-earlier period. The full-year forecast presented by the company is revenue of ¥5,900 billion, operating income of ¥460 billion, ordinary income of ¥402 billion, and net income attributable to owners of the parent of ¥266 billion. On a simple calculation, first-quarter progress was 23.9% for revenue and 28.4% for operating income, indicating that operating income is ahead of revenue.

The full-year forecast was raised across the board from the figures presented with the previous fiscal year’s results: revenue of ¥5,800 billion, operating income of ¥400 billion, ordinary income of ¥342 billion, and net income of ¥227 billion. The operating income forecast was raised by ¥60 billion and the net income forecast by ¥39 billion. However, FY2026 March operating income of ¥614,879 million included a ¥115,675 million decrease in operating expenses due to the amortization of actuarial differences on retirement benefits and other factors. The company states that FY2027 March operating income would be down 7.9% year on year excluding this special factor, a significant difference from the reported decline of 25.2%.

The first-quarter operating margin was 9.28%, a slight improvement from approximately 9.14% in the year-earlier period. Meanwhile, the forecast operating margin, calculated by dividing the full-year operating income forecast by the full-year revenue forecast, is only approximately 7.8%. Applying a mechanical 50% benchmark to the second-quarter cumulative results against the full-year forecast gives revenue of ¥2,950 billion and operating income of ¥230 billion. However, because the company has not quantified quarterly seasonality or profit allocation, these are benchmarks for monitoring progress, not the company’s plan itself.

At the next results announcement, it will be important to determine whether changes in operating income can be explained separately by retirement benefit factors, higher construction material and equipment prices, construction delays, sales volumes, property sales and other factors. In particular, whether the first-quarter profit increase represents underlying improvement exceeding the full-year assumptions or temporary progress before higher costs and construction delays become concentrated in the second half needs to be assessed based on first-half margins and whether the full-year forecast is maintained or revised again.