Revenue is up, but earnings remain stagnant, making the achievement of ¥900 million in full-year operating profit the key focus

FY2026-H1 consolidated revenue was ¥8,443 million, up 1.8% year on year. Operating profit was ¥334 million, ordinary profit was ¥279 million, and interim net income attributable to owners of the parent was ¥177 million, representing declines of 21.0%, 11.2% and 31.8%, respectively, from the same period a year earlier. A simple calculation gives an operating margin of approximately 3.95%, below the 4.1% recorded for FY2025 as a whole, indicating that higher revenue has not translated into higher profit.

The company’s FY2026 full-year forecasts are revenue of ¥17,500 million, operating profit of ¥900 million, ordinary profit of ¥700 million and net income of ¥500 million. H1 progress against these forecasts was 48.2%, 37.1%, 39.9% and 35.4%, respectively. Revenue is broadly in line with the passage of six months, while profit is lagging. Assuming a simple even quarterly progression, cumulative Q3 revenue of ¥13,125 million and operating profit of ¥675 million would be benchmarks.

To achieve the full-year forecasts based on H1 results, the company will need revenue of ¥9,057 million, operating profit of ¥566 million, ordinary profit of ¥421 million and net income of ¥323 million in the second half. In particular, operating profit would need to build from ¥334 million in H1 to ¥566 million in the second half, implying a substantial improvement in the profit margin. The question is whether the recovery from an operating loss of ¥42 million in FY2024 to operating profit of ¥667 million in FY2025 can continue in FY2026.

The company attributed the H1 decline in profit to lower sales of existing content and a reduction in margins caused by higher costs for building materials and other items, but it did not disclose a breakdown by factor or the rate of cost inflation. In Q3, attention will be paid not only to whether operating profit builds to approximately ¥675 million, but also to whether the company provides specific explanations of a recovery in content sales, the pass-through of building-material costs and improved margins in the asset management business, and whether the ¥900 million full-year operating profit forecast is maintained.