First-half operating profit exceeds 90% of the full-year plan; Q3 focus shifts from upside to earnings repeatability

In the first half of the fiscal year ending December 2026, revenue was ¥103,066 million and operating profit was ¥8,828 million. Progress against the full-year forecast was 51.3% for revenue, compared with 91.8% for operating profit, 95.0% for ordinary profit and 71.8% for net income attributable to owners of the parent, with profit items substantially ahead of revenue. In particular, the remaining gap between operating profit and the full-year forecast is only ¥792 million for the second half and beyond.

However, standalone second-quarter results have not been disclosed in the materials. Simply subtracting the cumulative figures gives standalone second-quarter operating profit of ¥3,547 million, calculated as ¥8,828 million minus first-quarter operating profit of ¥5,281 million. This is below the ¥5,230 million recorded in the same quarter of the previous year, calculated as cumulative operating profit of ¥9,854 million less first-quarter operating profit of ¥4,624 million. On a simple calculation, standalone second-quarter operating profit was down approximately 32% year on year, so it is important not to assess the full-year earnings pace based solely on the cumulative progress rate.

Profit margins also require review. The first-half operating margin was approximately 8.6% on a calculated basis, down approximately 0.9 percentage points from about 9.5% in the same period of the previous year. By segment, gas profit was ¥8,946 million, LPG and other energy profit was ¥1,686 million, and other profit was ¥129 million. Higher profit from LPG and other energy partly offset declines in gas and other profit, but a high consolidated operating-profit progress rate does not mean that underlying earnings power has improved.

At the next results announcement, we will check whether cumulative operating profit through Q3 has reached ¥9,620 million, or whether the additional profit required in Q4 has fallen below ¥792 million. We will also assess whether the company discloses standalone second-quarter operating profit, the gap between operating profit and ordinary profit, and whether it has revised its full-year earnings forecast. These will be key indicators in judging the sustainability of profit running ahead of revenue.