Interim-period profit is ahead of plan, but the full-year target requires a second-half acceleration in sales

FY2026 interim-period revenue was ¥4,905.2 million, up 6.1% year on year, while operating profit was ¥434.9 million, up 135.2%, and ordinary profit was ¥430.8 million, up 120.6%. Profit growth substantially exceeded revenue growth, with the operating margin improving to approximately 8.9%. In the demolition business, profit was lifted by the reversal of the substantial construction costs recorded in the same period of the previous year and progress on highly challenging projects. In the metals business, higher iron and copper scrap prices also supported profit, while the environmental business reported lower profit because of the reversal of a large project in the same period of the previous year.

The full-year forecasts are ¥10,500 million in revenue, ¥800 million in operating profit, ¥778 million in ordinary profit and ¥524 million in net profit attributable to owners of the parent, and had not been revised as of the interim period. On a simple calculation, revenue progress was 46.7% and operating profit progress was 54.4%. Profit is ahead of plan, but revenue is slightly below half of the annual target. Accordingly, the second half will require ¥5,594.8 million in revenue and ¥365.1 million in operating profit. The company has disclosed a tendency for performance to be stronger in the first and fourth quarters because of customers' asset-removal needs, so it would not be appropriate to judge likely underperformance solely against a simple 50% benchmark.

In FY2026-Q3, we will want to confirm how far cumulative revenue has risen from ¥4,905.2 million, as well as whether the operating margin has been maintained at around 8.8%. The interim-period improvement in profit includes the reversal of special factors from the previous year and higher scrap prices, so it will be important to determine whether improved profitability on new projects and fixed-cost absorption are continuing in Q3. In particular, the key evaluation points will be whether profit exceeding the ¥365.1 million required in the second half can be secured toward the ¥800 million full-year operating profit target, and whether the earnings forecast and ¥32 annual dividend remain unchanged.