First-half operating profit ahead of full-year forecast; Q3 to test sustainability of progress

First-half revenue was ¥8,881 million, representing 48.8% progress against the full-year forecast of ¥18,201 million stated in the financial summary. Operating profit, meanwhile, was ¥1,004 million, or 58.6% of the full-year forecast of ¥1,714 million. Compared with the simple 50% time-elapsed benchmark, revenue is broadly on plan, while operating profit is running ahead of schedule.

Compared with the same period of the previous year, revenue increased 25.8% from ¥7,058 million to ¥8,881 million, while operating profit rose 141.8% from ¥415 million to ¥1,004 million. The first-half operating margin also improved from approximately 5.9% to approximately 11.3%, indicating that higher revenue is flowing through to profit. However, a high profit progress rate does not necessarily indicate that the performance can be replicated in the second half. The effects of M&A consolidation, project profitability, and increases in hiring and personnel costs need to be separated.

For the next third-quarter results, revenue of ¥13,651 million and operating profit of ¥1,286 million, equivalent to 75% of the full-year forecasts, will be used as mechanical progress benchmarks. Exceeding these levels would indicate that profit is continuing to run ahead, but if operating profit stagnates while only revenue accumulates, the first-half margin improvement may have been temporary. In addition, the full-year forecasts are presented on both a Japanese GAAP basis and an IFRS-based outlook in the available materials, so the basis used for the forecasts should also be confirmed next time.