First-half operating profit reached 56.2% of the full-year plan, with profit growth running ahead

For the first half of the fiscal year ending December 2026, revenue was ¥9,550 million, operating profit was ¥362 million, ordinary profit was ¥335 million and net profit attributable to owners of the parent was ¥153 million. Compared with revenue of ¥9,116 million and operating profit of ¥288 million in the same period a year earlier, revenue rose 4.8% and operating profit rose 25.8%. Revenue was at 49.0% of the full-year forecast of ¥19,500 million, while operating profit was at 56.2% of the ¥645 million forecast, indicating that profit is progressing faster than revenue.

Profit margins also improved. The first-half operating margin was approximately 3.8%, calculated as ¥362 million divided by ¥9,550 million, up approximately 0.6 percentage points from approximately 3.2% in the same period a year earlier. The supplementary materials cite the revision of government-set childcare fees, contributions from new facilities, higher contract unit prices and improved facility operating efficiency as factors behind the increase in profit. However, the full-year operating margin is approximately 3.3%, calculated as ¥645 million divided by ¥19,500 million, so the company is not necessarily assuming that the first-half margin will continue unchanged throughout the full year.

Simply subtracting first-half results from the full-year forecast implies that the second half will require revenue of ¥9,950 million, operating profit of ¥283 million, ordinary profit of ¥255 million and net profit of ¥137 million. The required second-half operating margin is approximately 2.8%, below the first-half margin of 3.8%, so the numerical hurdle is not excessively high. However, quarterly profit allocation will vary depending on the opening dates of childcare facilities, start-up costs for nursing-care facilities and the extent of losses in the lifestyle support business.

In the third quarter, the key issue is not whether cumulative operating profit can maintain the simple 75% benchmark, but whether the substance of the earnings growth depends on temporary differences in the timing of expense recognition. The company explained that expenses declined in the first quarter because settlement of the government-set childcare fee revision was brought forward from March of the previous year to December 2025, and this may create a reversal effect after the first half. In addition, the supplementary materials do not disclose standalone three-month first-half earnings or a bridge showing the amounts attributable to each factor. In the third quarter, we will therefore examine not only cumulative profit but also standalone July–September profit, labor costs, opening costs and changes in segment profit.