First-half revenue increased, but operating profit is behind the full-year plan, requiring acceleration in Q3

Revenue in the first half of the fiscal year ending December 2026 was ¥1,100.6 billion and operating profit was ¥64.7 billion. Revenue reached 50.0% of the full-year forecast of ¥2,200.0 billion, broadly in line with the simple six-month run rate for the first half. By contrast, operating profit was approximately 43.1% of the ¥150.0 billion forecast, indicating that profit is lagging revenue. As the full-year forecast has not been revised, FY2026-Q3 will need to establish whether concern over the shortfall in profit through the first half is temporary or whether the plan assumes higher margins in the second half.

Working back from the full-year forecast, the second half needs to generate ¥1,099.4 billion in revenue and ¥85.3 billion in operating profit. The required revenue is almost the same as the ¥1,100.6 billion recorded in the first half, but operating profit must be approximately ¥20.6 billion higher than the first-half ¥64.7 billion, requiring a level approximately 32% above the first half. To reach nine-month operating profit of ¥112.5 billion, equivalent to 75% of the full-year forecast, standalone third-quarter operating profit must be at least approximately ¥47.8 billion.

On a quarterly basis, first-quarter revenue was ¥538.0 billion and operating profit was ¥38.5 billion, compared with second-quarter revenue of ¥562.6 billion and operating profit of ¥26.2 billion. Although revenue increased, operating profit fell by ¥12.3 billion on a simple comparison, indicating that first-half revenue growth did not translate directly into accelerating profit. The company attributed the pressure to higher manufacturing costs and increased business-structure improvement expenses. FY2026-Q3 should clarify whether these expenses will abate or remain embedded in the second-half plan.

The key points to monitor are whether nine-month operating profit reaches at least ¥112.5 billion and whether improvements in architectural glass, chemicals and life sciences continue against the segment operating profit plans for the second half. Chemicals and architectural glass lifted profit in the first half, while automotive and electronics posted lower profit despite higher revenue. It will therefore be necessary to determine which businesses will drive the required company-wide acceleration in profit, assessing not only revenue but also profit and margins.