Revenue guidance was raised, but operating profit guidance was unchanged, leaving little room in profit progress

Revenue for the cumulative first half of FY2026 was ¥431,035 million, up 7.8% year on year, while operating profit was ¥28,839 million, up 9.8%. At the second-quarter results announcement, the company raised its full-year revenue forecast from ¥850,000 million to ¥880,000 million, but left its operating profit forecast unchanged at ¥70,000 million. The revenue forecast was raised by ¥30,000 million, or approximately 3.5%, and the increase in revenue has not translated directly into a higher profit forecast.

Progress against the full-year forecasts was 49.0% for revenue, 41.2% for operating profit, 40.6% for ordinary profit and 35.6% for interim net profit attributable to owners of the parent. Revenue has reached almost half the full-year forecast, while operating profit and the other profit measures remain around 40%. Operating profit progress was 21.2% at the first-quarter stage, so although the second quarter alone showed improvement, profit recovery in the second half will be necessary to meet the full-year target.

On a simple calculation, achieving the full-year forecasts will require second-half revenue of ¥448,965 million, operating profit of ¥41,161 million, ordinary profit of ¥38,016 million and net profit attributable to owners of the parent of ¥25,770 million. Operating profit in particular will need to be substantially higher in the second half than the first-half result of ¥28,839 million. The third-quarter cumulative figures and segment commentary should clarify the extent to which price revisions, the absorption of raw material and fuel costs, a recovery in sales volumes and improved operating rates have progressed.

In the third quarter, it will be necessary to determine whether the increase in revenue is accompanied by improved margins, and whether the higher revenue forecast reflects increased volumes or foreign-exchange and pricing factors. Even if the operating profit forecast is maintained, updates to the assumptions for second-half profit, raw material and fuel prices and the demand environment will be key to assessing the reliability of the full-year plan.