Revenue increased but profit declined in the first half; profit recovery in the second half is needed to meet the full-year forecast

First-half revenue for the fiscal year ending December 2026 was ¥3,145 million, operating profit was ¥888 million, ordinary profit was ¥922 million, and net profit attributable to owners of the parent was ¥560 million. In the year-earlier period, revenue was ¥3,125 million, operating profit ¥955 million, ordinary profit ¥985 million, and interim net profit ¥685 million. Revenue therefore rose 0.6%, while operating profit, ordinary profit and interim net profit declined 7.0%, 6.4% and 18.2%, respectively. The operating margin fell by approximately 2.3 percentage points, from about 30.6% in the year-earlier period to about 28.2%.

The full-year forecast was maintained at revenue of ¥6,209 million, operating profit of ¥1,829 million, ordinary profit of ¥1,889 million and net profit of ¥1,302 million. First-half progress was 50.7% for revenue, 48.6% for operating profit, 48.8% for ordinary profit and 43.1% for net profit. Revenue exceeded the simple 50% benchmark for the interim period, while profit was somewhat below it. Based on first-half results, meeting the full-year forecast requires second-half revenue of ¥3,063.6 million, operating profit of ¥940.5 million, ordinary profit of ¥966.5 million and net profit of ¥741.3 million.

On earnings, the earnings presentation breaks down the year-on-year change in first-half operating profit into a positive ¥19 million revenue factor, a positive ¥13 million gross margin factor and a negative ¥99 million SG&A factor. The company cites the renewal of its ERP system, security investment, recruitment of front-line personnel and strategic hiring in the health-tech area as factors behind higher costs, but has not disclosed investment amounts by initiative or the increase in personnel costs. The company has historically explained that revenue tends to be concentrated in the fourth quarter, so the first-half progress rate alone is not enough to conclude that the full-year forecast will be missed. However, project recognition and cost absorption in the second half will be necessary to recover ¥940.5 million in operating profit.

In FY2026-Q3, we will check whether nine-month cumulative revenue and operating profit reach the mechanical 75% benchmarks of ¥4,656.8 million and ¥1,371.8 million. Given the business's fourth-quarter concentration, however, the assessment should also cover the timing of recognition of the ¥1,693.2 million order backlog, acceptance status for hospital and clinic projects, reduction of the ¥99 million SG&A factor, and whether the full-year forecast is maintained or revised.