FY2026 earnings are front-loaded, leaving limited room to meet the full-year forecast

Revenue for the 9-month period was ¥8,747 million, operating profit was ¥1,179 million, ordinary profit was ¥1,083 million, and net income attributable to owners of the parent was ¥811 million. The full-year forecasts are revenue of ¥10,750 million, operating profit of ¥1,240 million, ordinary profit of ¥1,040 million, and net income of ¥785 million. Progress stands at 81.4% for revenue, 95.1% for operating profit, 104.1% for ordinary profit, and 103.3% for net income. Ordinary profit and net income have already exceeded their full-year forecasts by ¥43 million and ¥26 million, respectively.

On a simple calculation, revenue of ¥2,003 million and operating profit of ¥61 million will be required in the fourth quarter to meet the full-year forecasts. Operating profit appears to have made strong progress, but it is important to note that the 9-month result benefited from gold and copper prices and transaction volumes. If prices reverse in the fourth quarter, or if one-off expenses such as equipment installation and hiring increase, the operating margin could decline even if revenue meets the plan.

Operating profit accumulated from ¥300 million in the first quarter, to ¥717 million at the interim period, and ¥1,179 million for the 9-month period. Compared with revenue of ¥6,367 million and operating profit of ¥324 million in the same period of the previous year, current-period revenue is up 37.4% and operating profit is up 263.4%. The operating margin has risen by approximately 8.4 percentage points, from approximately 5.1% to approximately 13.5%. The central issue for the full-year results will be whether the structure in which profit growth greatly outpaces revenue growth continues, or whether the margin declines as metal prices normalize.

The company attributes the increase in revenue and profit to higher transaction volumes of precious metals and higher gold and copper prices, but has not disclosed the contribution of price and volume factors, the transaction volumes themselves, or changes in unit prices. A cash flow statement for the 9-month period has also not been prepared, so the extent to which profit has been converted into cash cannot be confirmed until the full-year results. At the next results announcement, it will be necessary to review gross profit and operating margins after any price reversal, year-on-year transaction volumes, LiB equipment-related expenses, and operating cash flow together.