FY2026 full-year forecast: 80% of profit achieved by 3Q, with 4Q results the focus

Third-quarter cumulative revenue was ¥7.070 billion, up 3.6% year on year, while operating profit was ¥1.079 billion, up 13.7%. Ordinary profit was ¥1.125 billion and net profit was ¥780 million, up 15.7% and 17.7%, respectively, from the same period a year earlier. The full-year forecast announced in June was raised to revenue of ¥9.500 billion, operating profit of ¥1.350 billion, ordinary profit of ¥1.400 billion and net profit of ¥950 million. These forecasts were left unchanged in the third-quarter results.

Progress against the full-year forecast was approximately 74.4% for revenue, 79.9% for operating profit, 80.4% for ordinary profit and 82.1% for net profit. On a simple calculation, the full-year forecast would be reached if 4Q revenue of ¥2.430 billion, operating profit of ¥271 million, ordinary profit of ¥275 million and net profit of ¥170 million were recorded. As profit progress is ahead of revenue progress, the full-year outcome will depend less on a substantial increase in 4Q revenue than on whether construction margins can be maintained.

The company cited higher orders and improved construction margins as factors behind the earnings growth. However, it has not broken down which projects will be recognized as revenue in 4Q, the expected level of completed construction revenue, the specific construction margin, or the increase or decrease in selling, general and administrative expenses. In construction, the timing of revenue recognition varies depending on project schedules and progress. Full-year achievement therefore cannot be judged solely by cumulative progress rates; the profitability and completion timing of the remaining projects also need to be confirmed.

At the next full-year results announcement, it will be necessary to confirm not only whether the company achieved the forecasts of ¥9.500 billion in revenue and ¥1.350 billion in operating profit, but also whether the forecast increase in June resulted from temporary project recognition or from sustained improvement in orders and profitability. If operating profit falls short of ¥1.350 billion, the company will need to explain, with amounts, whether the cause was delayed revenue recognition, lower construction margins or higher SG&A expenses.