Revenue growth continues, but operating profit growth is lagging sales growth

FY2026-H1 consolidated revenue was ¥7,634.061 million, up 17.6% year on year, operating profit was ¥390.593 million, up 3.9%, and interim net profit attributable to owners of the parent was ¥301.823 million, up 29.4%. Operating profit growth was lower than revenue growth, leaving the operating margin at approximately 5.12%. The operating margin calculated from the comparative figure for the same period of the previous year was approximately 5.79%, indicating that profitability remains under pressure even amid revenue growth.

The full-year forecasts are revenue of ¥14,000 million, operating profit of ¥800 million, net profit attributable to owners of the parent of ¥650 million and an annual dividend of ¥45. The interim-period progress rates were approximately 54.5% for revenue, 48.8% for operating profit and 46.4% for net profit. On a simple residual basis, the second half would therefore require approximately ¥6,366 million in revenue, ¥409 million in operating profit and ¥348 million in net profit. In FY2026-Q3, we will check whether nine-month cumulative operating profit has exceeded half of the full-year plan and whether the company provides a basis for further profit accumulation in the second half.

By segment, valve business revenue was ¥7,344.557 million and segment profit was ¥200.593 million, up 18.4% and 7.2% year on year, respectively. Real estate leasing revenue was ¥289.504 million, roughly unchanged year on year, while segment profit was ¥190 million, up 0.7%. Accordingly, the potential upside to consolidated profit depends mainly on volume, pricing and cost improvements in the valve business. In the next results release, in addition to whether the full-year forecast is revised, it will be important to see whether the company can provide further information on the drivers of the difference between segment profit and consolidated operating profit, the full-year operating margin outlook, and previously undisclosed orders, order backlog and regional revenue.