Will operating profit growth without revenue growth continue in the first half?

For the fiscal year ending March 2026, revenue was ¥1,246,048 million and operating profit was ¥166,882 million, resulting in an operating margin of 13.4%. Revenue increased only 8.3% year on year, while operating profit rose 18.6%, meaning that profit growth had already outpaced revenue growth in the prior fiscal year. For the fiscal year ending March 2027, the company plans revenue of ¥1,400,000 million and operating profit of ¥190,000 million, implying a full-year operating margin of approximately 13.6% based on a simple calculation.

First-quarter revenue was ¥285,774 million, operating profit was ¥46,593 million and ordinary profit was ¥40,725 million. The operating margin was approximately 16.3%, and operating profit increased 12.7% even as revenue declined slightly year on year. Operating profit was approximately 24.5% of the full-year forecast, compared with 20.4% for revenue. Against 25% of the fiscal year having elapsed at the end of June, profit is therefore running ahead of revenue on a relative basis.

However, the first-quarter financial results summary does not explain the specific quantitative or monetary factors behind changes in performance, instead directing readers to the separately published presentation materials. The summary figures alone therefore do not show whether the ¥46,593 million in operating profit was driven by rental income, property sales, brokerage fees, facility occupancy rates or cost controls. For the prior full year, sales to investors, brokerage and improved occupancy at office and commercial facilities were cited as factors behind profit growth, but the extent of their contribution in the first quarter has not been disclosed.

In the next first-half results, the initial benchmark will be the simple 50% progress thresholds of ¥700,000 million in revenue and ¥95,000 million in operating profit. However, property sales and condominium sales are subject to seasonality in their timing, and these levels are not the company’s formal first-half targets. Accordingly, it will be necessary to review not only progress rates but also the first-half operating margin, the comparison with the prior full-year margin of 13.4%, the profit bridge by segment, and whether the full-year operating profit forecast of ¥190,000 million is maintained or revised.