Testing the consistency of a downward revision to first-half ordinary profit with an unchanged full-year forecast

In the earnings revision announced on 22 October 2026, the consolidated ordinary profit forecast for FY2027-H1 was cut by ¥300 million, from the previous forecast of ¥3,200 million to ¥2,900 million. The revised figure is below approximately ¥3,120 million in the same period of the previous year, implying a decline of approximately 7% year on year. Meanwhile, the full-year ordinary profit forecast was maintained at ¥7,650 million, leaving an assumption that the first-half shortfall will be absorbed in the second half.

The latest FY2027-Q1 results were ordinary profit of ¥1,288 million, operating profit of ¥1,084 million and net income attributable to owners of the parent of ¥856 million. First-quarter progress was approximately 16.8% against the full-year ordinary profit forecast of ¥7,650 million and approximately 44.4% against the revised first-half forecast of ¥2,900 million. While operating profit declined only 1.3% year on year in the first quarter, ordinary profit increased 0.1% and net income increased 6.8%, indicating that the main reason for the first-half revision cannot be explained solely by sales and gross profit in the core business.

As reasons for the revision, the company cited the expectation that non-operating income and expenses would be below the initial forecast due to the recording of losses on the management of investment partnerships and other items, as well as the expectation that tax expenses would exceed assumptions. However, the news information provided does not break out the amount of the investment losses, the year-on-year change in non-operating income and expenses, or the increase in tax expenses. At the next interim results announcement, it will be necessary to examine not only whether ordinary profit reaches ¥2,900 million, but also the bridge from operating profit to ordinary profit, the tax burden from profit before taxes to net income, and the basis for maintaining the full-year forecast of ¥7,650 million.