First-half operating profit recovery reached half the full-year forecast, but sustainability in the second half is now the focus

In the first half of the fiscal year ending December 2026, revenue was ¥31,406 million, up 6.3% year on year, while operating profit was ¥1,269 million, up 129.5%. Ordinary profit was also ¥1,268 million, up 136.5%, confirming improvement from operating profit through to ordinary profit. In the first half of 2025, revenue was ¥29,542 million and operating profit was ¥553 million, so the recovery in profit was substantially greater than the increase in revenue. However, interim net profit attributable to owners of the parent was ¥838 million, down sharply from ¥8,740 million in the same period a year earlier, meaning that operating performance and bottom-line profit moved in opposite directions.

The full-year forecasts are revenue of ¥62,200 million, operating profit of ¥2,540 million and ordinary profit of ¥2,300 million. First-half progress was approximately 50.5% for revenue, calculated as ¥31,406 million divided by ¥62,200 million, and approximately 50.0% for operating profit, calculated as ¥1,269 million divided by ¥2,540 million. On a simple calculation, the company needs revenue of ¥30,794 million and operating profit of ¥1,271 million in the second half, implying that it must generate almost the same amount of profit in the second half as in the first. Given seasonality and raw-material price volatility, cumulative Q3 profit will be an important indicator when assessing the credibility of the full-year forecasts.

The company says it has pursued sales expansion for core products, the development and sale of higher-value-added products, and the development of new markets and customers, in addition to appropriate pricing, a review of procurement and improvements in production efficiency. However, the first-half earnings materials did not disclose unit-price or volume-based KPIs such as the amount of price increases, sales volumes, raw-material unit prices or procurement savings. Accordingly, the Q3 segment discussion and expense breakdown will need to be reviewed to determine whether the first-half profit increase reflected established price pass-through or depended on temporary reductions in selling, general and administrative expenses or the absence of the head-office relocation costs incurred in the previous year.

The latest information indicates that the next earnings announcement is scheduled for 9 November 2026. In FY2026-Q3, the key points will be cumulative revenue and operating profit, progress against the full-year forecasts, whether the forecasts are maintained or revised, and the outlook for procurement costs resulting from vegetable-oil raw-material prices, yen depreciation and the Middle East situation. In particular, we will track whether the company provides a more specific explanation of how it will secure the ¥1,271 million of operating profit required in the second half, rather than simply extending the first-half operating margin.