Full-year plan after the upward revision: verify progress and repeatability in Q3

Revenue for the interim period of the fiscal year ending December 2026 was ¥118,415 million, up 18.0% year on year, while operating profit was ¥9,022 million, up 53.8%. Profit before tax was ¥10,396 million and interim profit attributable to owners of the parent was ¥8,257 million, representing year-on-year increases of 114.5% and 67.5%, respectively. The operating margin was approximately 7.6% for the interim period, an improvement of roughly 1.8 percentage points from approximately 5.8% a year earlier.

Following the interim results, the full-year forecasts were raised to revenue of ¥247,700 million, operating profit of ¥19,700 million, profit before tax of ¥20,000 million and profit attributable to owners of the parent of ¥15,800 million. As of Q1, the full-year forecasts were revenue of ¥233,500 million and operating profit of ¥16,500 million, making the latest revisions ¥14,200 million for revenue and ¥3,200 million for operating profit. The key point to verify in Q3 is that the upward revision to profit exceeds the growth in revenue, rather than reflecting revenue growth alone.

Based on the interim results, achieving the full-year plan requires second-half revenue of ¥129,285 million and operating profit of ¥10,678 million. A simple 75% progress benchmark for the nine-month period is revenue of ¥185,775 million and operating profit of ¥14,775 million. However, the materials provided do not disclose quarterly seasonality or the progress rate assumed by the company for Q3, so these figures should be treated as mechanical comparison benchmarks, not company targets.

The dividend forecast was also raised from ¥50 for the year as of Q1 to ¥60 for the year. In Q3, we will assess whether the revised operating profit forecast of ¥19,700 million depends on one-off factors, whether Industrial can continue executing projects in the second half, and whether operating-level profit progress excluding foreign exchange gains is being maintained. Maintaining the ¥30 year-end dividend will be another item to monitor alongside the earnings forecast.