H1 is ahead on profit progress; building revenue in H2 is the key to meeting the full-year target

Revenue for the six months from January through June 2026 was ¥17,104 million, representing progress of 47.5% against the full-year forecast of ¥36,000 million. Operating profit, meanwhile, was ¥1,680 million, reaching 56.0% of the full-year forecast of ¥3,000 million. As of the interim period, progress toward operating profit was 8.5 percentage points ahead of revenue progress, supported not only by the effect of higher revenue but also by improved margins in the public-sector business of the environmental energy segment.

To meet the full-year forecast, the company needs to add ¥18,896 million in revenue and ¥1,320 million in operating profit from July onward. This means recording the remaining 52.5% of revenue in H2, compared with interim progress of 47.5%, while only 44.0% of the operating profit target remains. In other words, the company may be able to meet its profit target even if revenue recognition does not progress as expected in H2, but it will be necessary to assess whether improved margins can offset a revenue shortfall.

The company discloses a tendency for revenue and profit to be weighted toward the first and fourth quarters due to the nature of its businesses, but does not provide quarterly company forecasts. Therefore, in FY2026-Q3 it will be necessary to examine not only nine-month revenue and operating profit, but also progress on construction and equipment projects scheduled for recognition in H2 and the conversion of orders into revenue. The key questions are where nine-month revenue stands against the full-year forecast of ¥36,000 million and whether the project mix makes it realistic to record ¥18,896 million in the remaining fourth quarter.

At the next results announcement, we will check whether the full-year forecasts of ¥36,000 million in revenue and ¥3,000 million in operating profit are maintained, as well as the company’s explanation of the likelihood of achieving them based on nine-month results. Even if operating profit continues to progress ahead of revenue, it will be necessary to determine whether this reflects structural cost reductions or a temporary improvement in project profitability.