First-half operating profit reaches 40% of full-year plan; Q3 needed to reconfirm profit progress

Consolidated revenue in FY2026 H1 was ¥99.566 billion, up 1.1% year on year, while operating profit was ¥1.834 billion, up 10.6%. The full-year forecasts in the financial summary are revenue of ¥214 billion and operating profit of ¥4.5 billion, putting first-half progress at 46.5% for revenue and 40.8% for operating profit. Compared with a simple half-year run rate, revenue is broadly on track, while operating profit needs to build by ¥2.666 billion in the second half.

However, profit generation is not uniform across quarters. Operating profit was ¥1.678 billion in Q1, but reached ¥1.834 billion cumulatively in H1, implying standalone Q2 operating profit of only ¥156 million. The first-half operating margin was also 1.84%, so Q3 will need to confirm again how sustainable profit accumulation is relative to revenue growth.

A mechanical benchmark assuming 75% of the full-year plan is achieved in nine months would be revenue of ¥160.5 billion and operating profit of ¥3.375 billion. Based on first-half results, this would require standalone Q3 operating profit of ¥1.541 billion, but this is not a company forecast; it is a threshold for checking progress that disregards seasonality. In practice, quarterly fluctuations may arise from domestic demand for residential hot-water equipment, market conditions in China, higher costs and foreign-exchange movements.

At the next earnings release, it will be important to review not only net profit but also operating profit, ordinary profit and segment profit separately. In particular, first-half net profit was boosted by non-operating and extraordinary factors, including gains on sales of investment securities. The key points to check are whether cumulative Q3 operating profit approaches ¥3.375 billion, whether the ¥4.5 billion full-year operating profit forecast can be maintained, and whether the revenue forecast moves from ¥214 billion.