Full-year forecast depends on booking large projects in Q4, creating significant timing risk

For the 9 months ended Q3 of the fiscal year ending August 2026, revenue was ¥3,135 million and operating profit was ¥609 million, representing progress rates of 44.8% and 55.4%, respectively, against full-year forecasts of ¥7,000 million and ¥1,100 million. Compared with the simple 75% time-based progress after 9 months, revenue was 30.2 percentage points behind and operating profit was 19.6 percentage points behind. If the full-year forecasts are maintained, the company needs to generate ¥3,865 million in revenue and ¥491 million in operating profit over the remaining 3 months.

As of Q2, the company explained that revenue from B/S utilization investment projects, which had been concentrated in the first half of the previous fiscal year, was expected to be concentrated in the second half of the current fiscal year. Accordingly, the low cumulative progress may reflect project timing as well as a simple shortfall in demand. However, the cumulative Q3 figures alone do not show the value, gross margins, or settlement timing of planned sales of real estate held for sale and other projects in Q4.

At the full-year results, it will be necessary to review standalone Q4 revenue and operating profit, actual sales of real estate held for sale, and the amount of revenue to be booked from contracted projects. In particular, orders received, order backlog, and contract values by project have not previously been disclosed quantitatively, so any disclosure supporting achievement of the forecasts will be important. Even if revenue reaches ¥3,865 million, failure to achieve ¥491 million in operating profit would make the shortfall against the full-year forecast apparent on the earnings side.