Can the first-quarter lead in operating profit be replicated in the first half?

In Q1 from April to June 2026, revenue was ¥10,081 million, up ¥575 million from ¥9,506 million in the same period a year earlier, while operating profit was ¥849 million, up ¥276 million from ¥573 million. Revenue growth was limited to 6.1%, whereas operating profit increased 48.0%, meaning profit growth outpaced revenue growth. Ordinary profit was ¥1,002 million, and net income attributable to owners of the parent was ¥662 million.

The FY2027 full-year plan calls for revenue of ¥41,000 million, operating profit of ¥2,000 million, ordinary profit of ¥2,600 million and net income attributable to owners of the parent of ¥1,750 million. Q1 progress rates were 24.6% for revenue, 42.5% for operating profit, 38.5% for ordinary profit and 37.8% for net income, with operating profit particularly ahead of schedule. The figures of ¥20,500 million and ¥1,000 million for the first half are not company targets incorporating seasonality, but benchmarks representing a simple 50% progression against the full-year plan.

As reasons for the increase in Q1 profit, the company cited solid construction demand, sales activities focused on profitability, efforts to expand sales, appropriate price improvements, proposals for high-value-added construction methods and cooperation with consolidated subsidiaries. However, it has not provided a quantitative breakdown by volume, unit price, construction method or cost showing how the ¥575 million increase in revenue and ¥276 million increase in operating profit were generated. As the company operates in a single segment, it has also not disclosed segment revenue or profit, so it is not possible to determine whether profit progress depends on specific construction projects or temporary orders.

As of Q1, there had been no revision to the latest full-year earnings forecast, and the ¥2,000 million operating profit forecast was maintained. Accordingly, in H1 it will be necessary to confirm not only whether the company exceeds the 50% benchmark, but also whether it raises the full-year forecast in light of the strong operating profit progress or leaves it unchanged because of factors such as materials prices, labour costs and construction delays. In particular, if H1 operating profit is below ¥1,000 million, the company will need to explain the assumption that it will generate more than ¥1,000 million in the second half.