Downturn recovery in the second half and likelihood of achieving the ¥3,316 million full-year forecast

FY2026-H1 consolidated revenue was ¥10,434 million, operating profit was ¥922 million, ordinary profit was ¥1,279 million, and interim net profit attributable to owners of the parent was ¥663 million. Year on year, these figures declined by 14.1%, 55.7%, 46.7% and 58.6%, respectively, with operating profit declining far more sharply than revenue. The operating margin also fell by approximately 8.3 percentage points, from approximately 17.1% in the same period of the previous year to approximately 8.8% in the first half of the current fiscal year.

The full-year forecasts are revenue of ¥22,762 million, operating profit of ¥3,316 million, ordinary profit of ¥3,939 million and net profit of ¥2,193 million. First-half progress was approximately 45.8% for revenue and approximately 27.8% for operating profit, with profit notably behind the simple 50% benchmark at the halfway point of the fiscal year. The company attributes the declines in revenue and profit to the completion of demand related to health administration initiatives and electronic prescriptions, which was concentrated in the previous year, as well as its shift in sales strategy away from promoting replacements among existing customers and toward acquiring customers from competitors and prioritising value-added products.

At the consolidated level, operating profit, ordinary profit and net profit all remained positive. By segment, the dispensing pharmacy systems business generated operating profit of ¥1,276 million, the medical systems business posted an operating loss of ¥254 million, the nursing care and welfare systems business posted an operating loss of ¥130 million, and Other businesses generated operating profit of ¥11 million. The dispensing pharmacy business therefore supports overall profit. Accordingly, the key points to confirm in Q3 are not merely a recovery in revenue, but whether the dispensing pharmacy business’s margin recovers while the medical and nursing care businesses simultaneously reduce their losses.

The current interim earnings report does not disclose cash flow from operating activities or standalone quarterly Q2 profit and loss. At the next earnings announcement, we will check the 3Q cumulative progress toward the full-year forecasts, as well as standalone Q3 revenue and operating profit, the timing of expenses scheduled for the second half, and whether the full-year forecasts are revised. The reliability of the full-year forecasts will depend not only on the completion of the decline in special demand, but also on when upfront costs associated with the shift in sales strategy begin to translate into profit.