Building momentum from the third quarter onward will be critical to offset the first-half decline in revenue and earnings.

Revenue for the first half of the fiscal year ending December 2026 was ¥22,657 million, down 12.5% year on year, while operating profit was ¥823 million, down 49.7%, and ordinary profit was ¥879 million, down 44.5%. Net profit attributable to owners of the parent was also ¥665 million, down 30.7%. Meanwhile, the full-year forecast remains unchanged at revenue of ¥58,000 million, operating profit of ¥4,176 million, ordinary profit of ¥4,262 million and net profit of ¥2,579 million.

First-half results as a percentage of the full-year forecast were 39.1% for revenue and only 19.7% for operating profit. Based on a simple calculation of the remaining amount, the second half will require revenue of ¥35,343 million and operating profit of ¥3,353 million. Operating profit in the second half alone will need to be approximately 4.1 times the ¥823 million recorded in the first half, making the recovery in profit, rather than revenue, the key focus.

The company has seasonal characteristics, with orders and completed handovers concentrated in the second and fourth quarters. In the fiscal year ended December 2025, 54.3% of revenue and 59.4% of operating profit were recorded in the second half. A second-half bias is therefore not abnormal in itself, but in 2026 first-half operating profit halved to ¥823 million from ¥1,637 million in the same period of the previous year. The company now needs ¥3,353 million, exceeding the previous year's second-half operating profit of ¥2,395 million. It will be necessary to determine whether this can be explained by the company's usual seasonality alone.

Progress against the initial first-half plan was 89.4% for revenue, 70.7% for operating profit and 73.0% for ordinary profit. The company cited shortages of materials and delivery delays associated with the situation in the Middle East, delays in construction progress by general contractors serving as prime contractors, and customers postponing orders due to rising interest rates. It has maintained its full-year forecast based on the buildup of deferred and new projects. In the third quarter, the key points will be whether operating profit exceeds the year-earlier level in the quarter alone, in addition to a recovery in revenue, and whether supplementary explanations are provided on the progress of projects, including orders received and order backlog, which have not been disclosed. The third-quarter results are scheduled for 13 November.