First-half results are on track for the full-year plan, but maintaining margins will be the focus in Q3

FY2026 first-half revenue was ¥4,552.975 million and operating profit was ¥1,410.722 million, up 17.0% and 17.3% year on year, respectively. Profit before tax was ¥1,461.137 million, while profit for the period attributable to owners of the parent was ¥1,003.223 million, meaning that profit items including non-operating income and expenses grew faster than operating profit. The trend of higher revenue and profit remained intact from Q1 through the first half.

The full-year forecasts are ¥9,572 million for revenue, ¥2,930 million for operating profit, ¥2,964 million for profit before tax and ¥2,147 million for profit attributable to owners of the parent, with no revisions made as of the first-half results. First-half progress was 47.6% for revenue and 48.1% for operating profit. Using 75% of the full-year forecast as a simple benchmark, cumulative Q3 revenue of ¥7,179.0 million and operating profit of ¥2,197.5 million represent key checkpoints. The impact of seasonality cannot be confirmed from this source, so performance needs to be assessed alongside the progress of the second-half projects identified by the company rather than through a mechanical pass-or-fail judgment.

Margins require attention. The first-half operating margin was 31.0%, up 0.1 percentage point from 30.9% a year earlier, while the gross margin was 63.9%, down 1.9 percentage points from 65.8%. The company disclosed increases in costs including technical specialist headcount and salaries, outsourcing expenses, maintenance and management costs, consumables, materials and depreciation. Even if revenue growth continues, it will be important to determine whether the decline in gross margin puts pressure on the operating margin. The full-year operating margin forecast is approximately 30.6%, so Q3 should confirm whether this level can be maintained.

The first-half materials did not provide quantitative data on regional revenue, orders received or order backlog, impairment losses, or the breakdown of extraordinary gains and losses. In Q3, points of focus will include year-on-year changes in cumulative revenue and operating profit, progress against the full-year forecasts, differences from plan by segment, and whether standalone three-month Q3 earnings are disclosed. Even if the full-year forecasts are maintained, it will be important to see whether the company explains which projects and cost assumptions will support the ¥5,019.025 million of revenue and ¥1,519.278 million of operating profit required in the second half.