Sales were essentially flat, while the operating loss widened, leaving a return to full-year profitability as a key issue to verify from Q3 onward.

Revenue for the interim period of FY2026 ending November was ¥31,916 million, down ¥79 million, or 0.2%, from ¥31,995 million in the same period of the previous year. While revenue was essentially flat, operating income deteriorated from a ¥32 million profit in the same period of the previous year to a ¥341 million loss, and ordinary income deteriorated from a ¥100 million loss to a ¥613 million loss. Profit declined much more sharply than revenue, indicating that the combination of volume, pricing and costs has not improved.

The company left its full-year forecast for the fiscal year ending November 2026 unchanged at revenue of ¥65,000 million, operating profit of ¥600 million, ordinary profit of ¥500 million and net income attributable to owners of the parent of ¥200 million. Interim revenue represented 49.1% of the full-year forecast, broadly in line with a simple 50% half-year benchmark, but operating income was a ¥341 million loss. To achieve full-year operating profit of ¥600 million, the company must generate ¥941 million of operating profit after the interim period, so it will be necessary to assess how much earnings have recovered on a nine-month cumulative basis.

Compared with the same period of the previous year, operating income swung from a ¥32 million profit to a ¥341 million loss, while the operating margin declined from approximately 0.1% to approximately negative 1.1%. The company said that, in addition to sluggish sales volumes caused by the prolonged downturn in housing demand, higher raw material, auxiliary-material and logistics costs weighed on profitability. In Q3, it will be important to determine how much the penetration of price revisions, recovery in sales volume and restraint of manufacturing and logistics costs each contributed to restoring operating profit.

Net income attributable to owners of the parent was a ¥231 million profit for the interim period, but this was a profit posted while the company still had an operating loss and an ordinary loss, and should be assessed separately from operating recovery. At the next results announcement, the key points will be whether the full-year forecast is revised, as well as whether the company provides specific explanations of nine-month cumulative operating profit, segment profits, income excluding extraordinary gains and the level of fourth-quarter profit required to meet the full-year forecast.