Examining the gap between the FY2026 forecast upgrade and cumulative 3Q profit progress

Revenue for the nine months ended 30 September 2026 was ¥12,384 million, up 7.8% year on year, while operating profit was ¥54 million, up 67.3%. However, ordinary profit was ¥65 million, down 21.4%, and net profit for the quarter was ¥10 million, down 73.6%. Revenue and operating profit appear to have improved, but the reversal of a temporary non-operating gain recorded in the same period of the previous year pushed down ordinary profit and below. The quality of earnings therefore cannot be described simply as an improvement in both revenue and profit.

Cumulative 3Q progress against the previous full-year forecasts was 64.8% for revenue, calculated as ¥12,384 million divided by ¥19,100 million; 6.6% for operating profit, calculated as ¥54 million divided by ¥820 million; 7.8% for ordinary profit, calculated as ¥65 million divided by ¥830 million; and 2.0% for net profit, calculated as ¥10 million divided by ¥500 million. Since operating profit had reached ¥502 million at the interim stage, the third quarter alone resulted in an operating loss of ¥448 million, an ordinary loss of ¥445 million and a net loss of ¥321 million. To meet the previous full-year forecasts, the company will need revenue of ¥6,716 million and operating profit of ¥766 million in the fourth quarter.

In the performance forecast revision announced on 22 October, the full-year ordinary profit forecast was reportedly raised from ¥830 million to ¥1,360 million, an increase of ¥530 million, or approximately 63.9%. However, the third-quarter results information provided does not confirm the revised forecasts for operating profit, revenue or net profit, nor whether the increase in ordinary profit is attributable to operating activities or non-operating income. It is therefore too early to conclude from the size of the revision alone that underlying earnings power has improved. The difference between operating profit and ordinary profit needs to be checked in the final results.

Operating profit in the fourth quarter of FY2025 was ¥812 million. Based on the previous forecast, FY2026 will require operating profit of ¥766 million in the fourth quarter, close to that figure, assuming that the acceptance of large seasonal projects proceeds as planned. Following the upgrade of the ordinary profit forecast to ¥1,360 million, the assessment of the sustainability of earnings growth will depend heavily on where operating profit ultimately lands.

At the next results announcement, the key points to check will be ① fourth-quarter revenue and operating profit, ② the achievement rate against the revised forecasts, ③ the amount and sustainability of non-operating income, and ④ the impact of extraordinary gains and losses and income taxes. In particular, if ordinary profit substantially exceeds expectations while operating profit falls short of the previous forecast, the possibility will increase that the upward revision depends on one-off factors.