The key focus is the recovery required in H2 to achieve the ¥600 million full-year forecast

FY2026-H1 revenue was ¥6,616 million, down 0.2% year on year and essentially flat. Operating profit was ¥27 million, ordinary profit was ¥88 million and interim net income attributable to owners of the parent was ¥35 million, down 89.8%, 72.3% and 83.5% year on year, respectively. All profit levels remained positive, but profit was extremely small relative to the scale of revenue.

On a simple progress calculation against the full-year forecasts, revenue reached 47.3% (¥6,616 million ÷ ¥14,000 million), while operating profit reached only 4.5% (¥27 million ÷ ¥600 million), ordinary profit 14.0% and net income 8.8%. To achieve the full-year forecasts, the company needs to generate ¥7,384 million in revenue, ¥573 million in operating profit, ¥542 million in ordinary profit and ¥365 million in net income in H2 alone. Profit recovery is a far greater challenge than revenue recovery.

The company explains that public works and the completion of private-sector facilities are concentrated in March, resulting in a tendency for performance to be weighted toward the second half. Accordingly, it would not be appropriate to judge shortfalls solely on the basis of a simple 50% half-year progress benchmark. However, operating profit fell by ¥246 million, from ¥273 million in FY2025-H1 to ¥27 million in FY2026-H1, a level that is difficult to explain through seasonality alone. The simultaneous occurrence of large loss-making projects in the building fittings business, lower renovation revenue related to automatic doors and higher SG&A expenses must be taken into account.

In Q3, we will compare nine-month cumulative revenue, operating profit, ordinary profit and net income with the full-year forecasts to determine whether the profit recovery is temporary or sustainable. In particular, it will be important to see how much operating profit has accumulated from the H1 level of ¥27 million, whether the full-year operating profit forecast of ¥600 million is maintained, and whether it is revised due to large loss-making projects or system-related costs. Even if the earnings forecasts are left unchanged, we will check whether the company provides additional details on project progress and profitability improvements that could cover the profit required in the remaining period.