Downward revision to the full-year ordinary profit forecast undermines the assumption of profitability in 2H FY2026

Consolidated revenue for the 9-month period was ¥7,534 million and operating profit was ¥257 million, up 6.0% and 16.0% year on year, respectively. At the time of the third-quarter earnings summary, the full-year forecasts were revenue of ¥11,000 million, operating profit of ¥380 million, ordinary profit of ¥370 million and net profit attributable to owners of the parent of ¥235 million. Revenue had reached 68.5% of the forecast and operating profit 67.6%, while ordinary profit was at 59.5% and net profit at 59.1%. Compared with progress toward the operating profit target, the weaker contribution from non-operating income and expenses and bottom-line profit was already an issue before the latest revision.

According to reports on the earnings revision dated 6 November, the full-year ordinary profit forecast was lowered from ¥370 million to ¥209 million, implying a 16.4% decline from the ¥250 million recorded in the same period of the previous year. Second-half ordinary profit or loss was also revised from the previously forecast ¥147 million profit to a ¥14 million loss. Despite securing ordinary profit of ¥220 million in the 9-month period, forecasting a loss for the second half suggests that raw material and energy costs, supply concerns and the delayed recovery of the Professional business may be concentrated in the fourth quarter.

Second-half revenue was also reportedly lowered from the previous forecast of ¥5,761 million to ¥4,670 million, while second-half net profit was cut from ¥92 million to ¥6 million. Accordingly, in the next full-year earnings release, results need to be reviewed by revenue, operating profit and ordinary profit to determine whether shipments under the large-scale replacement order for multi-dispensers were completed as planned, whether Industry orders converted into revenue and how much of the Professional catalog effect emerged in the fourth quarter.

The information available confirms the revised figures for full-year ordinary profit, second-half revenue, second-half ordinary profit or loss and second-half net profit, but not the revised figures for full-year revenue, operating profit and net profit or the revision amounts for each segment. In the next earnings release, whether the company discloses all full-year forecast items, a breakdown of the revision by amount, the factors behind the deterioration in non-operating income and expenses, and the payout ratio will be important checkpoints for assessing earnings transparency.