Can deliveries from Q3 onward bring the H1 revenue and profit declines back in line with the full-year plan?

For the interim period of the fiscal year ending December 2026, revenue was ¥28,424 million, operating profit was ¥3,270 million, ordinary profit was ¥2,691 million, and interim net profit attributable to owners of the parent was ¥1,856 million. Year on year, these figures were down 20.3%, 27.8%, 35.6% and 34.3%, respectively, resulting in lower revenue and profit across the main profit categories. Operating margin, calculated simply from revenue and operating profit, was approximately 11.5%, down approximately 1.2 percentage points from approximately 12.7% in the same period of the previous year.

The company has nevertheless left its full-year forecasts unchanged at ¥75,000 million in revenue, ¥8,500 million in operating profit, ¥7,500 million in ordinary profit and ¥5,130 million in net profit. At the interim stage, progress against the full-year forecasts was only 37.9% for revenue and 38.5% for operating profit, both below the 50% of the fiscal year that had elapsed. On a simple calculation, the company needs to generate ¥46,576 million in revenue and ¥5,230 million in operating profit in the second half, implying a plan to earn more operating profit in the second half than it did in the first half.

As the basis for the second half, the development business had delivered 406 of the 758 residence units scheduled for delivery in the fiscal year ending December 2026 by the end of the interim period. The land planning business had sold 5 projects, while the redevelopment business had sold 2 office buildings and 2 pre-owned residences. These figures indicate progress in terms of volume, but the interim materials did not disclose the contribution of each business to revenue, gross profit or operating profit.

At the next earnings release, the focus will be on how far deliveries and sales have progressed on a cumulative Q3 basis and how much the gap with the full-year forecasts has narrowed. In particular, it will be necessary to check standalone Q3 revenue, operating profit, operating margin and whether the full-year forecasts have been revised. This will be a point at which to determine whether the first-half revenue and profit declines were merely the result of delivery timing or reflected a structural delay accompanied by lower margins or funding constraints.