First-half progress led by revenue; FY2026-Q3 will show whether profits are catching up

FY2026-H1 consolidated revenue was ¥5,013.4 million, up 5.8% year on year, operating profit was ¥297.4 million, up 3.9%, and ordinary profit was ¥307.6 million, up 1.2%. Net profit attributable to owners of the parent was ¥203.8 million, down 16.1%, mainly because gains on the sale of cross-shareholdings were unusually high in the year-earlier period. Operating profit from the core business continued to increase. The operating margin for H1 was approximately 5.93%, down approximately 0.11 percentage points from approximately 6.04% in the year-earlier period.

The full-year forecast is revenue of ¥10,600 million, operating profit of ¥750 million, ordinary profit of ¥770 million and net profit of ¥530 million. H1 progress rates are therefore 47.3%, 39.7%, 40.0% and 38.5%, respectively. Revenue is close to the 50% mark expected after six months, while operating profit is 10.3 percentage points behind that level. To achieve the full-year forecast, the second half must generate revenue of ¥5,586.6 million, operating profit of ¥452.6 million, ordinary profit of ¥462.4 million and net profit of ¥326.2 million. Second-half operating profit would account for 60.3% of full-year profit.

However, the company has disclosed a risk that revenue and profit will be weighted toward Q4 because of major sales campaigns and year-end and New Year travel demand. It is therefore too early to conclude that the full-year target will be missed based solely on the H1 operating profit progress rate of 39.7%. In FY2026-Q3, it will be necessary to confirm whether cumulative revenue progress has reached around 70% and operating profit has accumulated to at least approximately ¥4,500 million, and to assess whether dependence on Q4 has become excessive.

Meanwhile, the H1 earnings release did not disclose regional revenue or amounts decomposing changes in orders received, order backlog and operating profit by price, volume and product mix. In FY2026-Q3, we will monitor whether sales growth continues for paper bags, paper packaging and corrugated products, as well as the extent to which capital investment, personnel investment, raw material costs and logistics costs, which contributed to the decline in margins, reduced operating profit on a cumulative Q3 basis. We will also assess whether the basis for maintaining the full-year forecast becomes more specific.