Operating profit is ahead in 1Q; assess the reliability of the full-year forecast in H1

In the first quarter from April to June 2026, revenue was ¥36,202 million and operating profit was ¥3,257 million, up 12.3% and 52.5%, respectively, from revenue of ¥32,241 million and operating profit of ¥2,136 million in the same period of the previous year. Progress against the full-year forecast was 24.1% for revenue and 28.3% for operating profit. Compared with the 25.0% elapsed-quarter ratio, revenue was broadly on plan while operating profit was 4.2 percentage points ahead.

As profit growth substantially outpaced revenue growth, the operating margin improved by approximately 2.4 percentage points, from approximately 6.6% in the previous year’s period to approximately 9.0% in the current quarter. Accordingly, at the next earnings announcement, it will be important to assess not only whether revenue growth continues but also whether profitability of around 9.0% can be maintained on a cumulative H1 basis, including the effects of price revisions and changes in the product mix.

Using half of the full-year forecast as a mechanical benchmark for H1, revenue would be ¥75,000 million and operating profit ¥5,750 million. Based on 1Q results, the required amounts for 2Q alone are revenue of ¥38,798 million and operating profit of ¥2,493 million. However, this is merely a simple calculation, not an H1 forecast provided by the company, and does not take seasonality or project timing into account. Full-year achievement should therefore not be judged solely on whether results exceed or fall short of these levels.

As of 1Q, there had been no change to the full-year earnings or annual dividend forecasts. Revenue of ¥150,000 million, operating profit of ¥11,500 million and an annual dividend of ¥38 were maintained. At the next earnings announcement, we will confirm the actual cumulative H1 revenue and operating profit, and whether the company leaves the full-year forecast unchanged or revises it to reflect the lead in profit progress.