The key focus in FY2027-H1 will be whether the forecast shift into the red is achieved

In FY2026-H1, revenue was ¥5,616 million, operating profit was ¥1 million, ordinary profit was ¥17 million, and interim profit attributable to owners of the parent was ¥221 million. By contrast, the revised FY2027-H1 forecast is revenue of ¥4,750 million, an operating loss of ¥460 million, an ordinary loss of ¥430 million, and an interim net loss attributable to owners of the parent of ¥340 million. Revenue is expected to decline approximately 15.4% year on year, operating income or loss is expected to shift from profit to loss, and net income or loss is expected to change from a profit of ¥221 million to a loss of ¥340 million.

In FY2027 Q1, revenue was ¥2,409 million, operating loss was ¥7 million, ordinary profit was ¥28 million, and profit attributable to owners of the parent was ¥6 million. Q1 revenue represented only approximately 15.1% of the full-year revenue forecast of ¥16,000 million, but the company has a strong concentration of government and local-government projects at fiscal year-end, meaning that low Q1 profitability is affected by seasonality. Accordingly, rather than simply comparing the first-quarter operating loss of ¥7 million with the first-half revised forecast of ¥460 million, it will be necessary to check how much project progress and profitability improved in Q2.

In the revised first-half forecast, revenue was reduced by ¥450 million from the previous plan of ¥5,200 million to ¥4,750 million, while the ordinary loss is expected to narrow by ¥320 million from ¥750 million to ¥430 million and the net loss by ¥490 million from ¥830 million to ¥340 million. The new operating forecast is an operating loss of ¥460 million, but the revised information provided does not allow the reduction in revenue and narrower loss to be broken down by the timing of project acceptance, extraordinary gains and losses, tax burden, or changes in cost estimates.

At the next interim results announcement, it will be important to explain not only the extent to which first-half actual results exceeded or fell short of the revised forecast, but also the structure behind the approximately ¥461 million year-on-year deterioration in operating profit. Because the company has a single segment, revenue and profit cannot be assessed by segment. Without disclosure of revenue recognized from projects delayed by construction schedules, additional revisions to cost estimates, increases in material costs, and the breakdown of extraordinary gains and losses and tax effects, it will be difficult to judge whether the shift into the red is temporary or ongoing.