Revenue rose, but operating profit fell; a sharp recovery in the second half is needed to meet the full-year profit forecast

Revenue for the six months from January through June 2026 was ¥2,423.310 million, operating profit was ¥153.331 million, ordinary profit was ¥201.759 million, and interim net profit attributable to owners of the parent was ¥97.768 million. In the year-earlier period, revenue was ¥2,331.138 million and operating profit was ¥211.712 million. Revenue therefore increased by ¥92.172 million, while operating profit decreased by ¥58.381 million. The operating margin declined by approximately 2.8 percentage points, from approximately 9.1% in the year-earlier period to approximately 6.3%.

The full-year forecasts are revenue of ¥5,200 million, operating profit of ¥500 million, ordinary profit of ¥566 million, and net profit attributable to owners of the parent of ¥363 million. As of FY2026-H1, progress toward these forecasts was approximately 46.6%, 30.7%, 35.6%, and 26.9%, respectively. If 75% of the full-year forecast is used simply as a benchmark at the nine-month point, the mechanical reference lines for cumulative nine-month results are revenue of ¥3,900 million, operating profit of ¥375 million, ordinary profit of ¥424.5 million, and net profit of ¥272.25 million. Reaching these levels from the interim results would require standalone third-quarter revenue of approximately ¥1,477 million and operating profit of approximately ¥222 million. These are reference figures for monitoring progress, not forecasts that reflect the seasonality indicated by the company.

The company attributed the decline in operating profit to increases in cost of sales and selling, general and administrative expenses despite higher revenue, particularly upfront investment in DX and AX promotion. However, it has not disclosed the amount of DX and AX costs, the increase in cost of sales or SG&A expenses, or the breakdown between product development expenses and ordinary expenses. The interim disclosure therefore does not show whether the decline in profit reflects temporary development investment or structural factors such as weaker pricing or volumes and a higher fixed-cost burden.

In the next earnings release, the key points will be progress toward the full-year forecast on a cumulative nine-month basis and the degree of recovery in the operating margin. In particular, it will be important to determine whether the delay in orders for the Cyano Project and the decline in domestic circular-material handling volumes have been resolved, whether upfront investment is continuing, and whether the effects of that investment are appearing as an improvement in gross profit or the SG&A ratio. Even if the company maintains its ¥500 million full-year operating profit forecast, weak profit accumulation by Q3 would increase dependence on Q4.