H1 returned to profitability, with earnings ahead of the full-year forecast; the focus for Q3 is whether the strong progress can continue

FY2026-H1 consolidated revenue was ¥4,208 million, up 22.0% from ¥3,448 million in the same period of the previous year. Operating profit was ¥586 million, ordinary profit was ¥666 million, and interim net profit attributable to owners of the parent was ¥438 million, all turning profitable from the operating loss of ¥95 million, ordinary loss of ¥59 million and interim net loss of ¥64 million recorded in the same period of the previous year. FY2025 full-year revenue was ¥7,338 million and operating profit was only ¥112 million, so earnings have recovered clearly.

The company’s FY2026 full-year forecasts are revenue of ¥8,150 million, operating profit of ¥730 million, ordinary profit of ¥830 million and net profit attributable to owners of the parent of ¥550 million. H1 progress was 51.6% for revenue, 80.3% for operating profit, 80.2% for ordinary profit and 79.6% for net profit. On a simple calculation, the amounts required in H2 to achieve the full-year forecasts are ¥3,942 million in revenue, ¥144 million in operating profit, ¥164 million in ordinary profit and ¥112 million in net profit. The key issue is maintaining margins rather than adding to revenue.

The company did not disclose its operating margin in this release. The consolidated operating margin calculated from H1 results was approximately 13.9%, while the full-year forecast implies a decline to approximately 9.0%. This gap suggests that margins may normalize in H2 because of the project mix, construction progress, material costs and subcontracting costs. At the next results announcement, the focus will be not only on cumulative 3Q profit progress, but also on whether the full-year forecast is maintained and whether the company provides additional explanations of the operating margin and the factors behind changes in profit.

The key question is whether H1’s earnings lead was driven by a concentration of large projects or construction progress, or represents a sustained improvement supported by the PC curtain wall business’s order backlog and factory utilization. If cumulative 3Q operating profit exceeds ¥586 million and the remaining ¥144 million can be generated without difficulty in H2, the likelihood of achieving the full-year forecast will increase. Conversely, if profit growth stalls in Q3 and the company signals a forecast revision or margin deterioration, it will be difficult to regard H1’s strong progress as representative of full-year earning power.