H1 revenue and profit increased, but profit is ahead of revenue in terms of progress toward the full-year forecast

FY2026-H1 revenue was ¥55,003 million, operating profit was ¥6,617 million, ordinary profit was ¥6,696 million, and interim net profit attributable to owners of the parent was ¥4,427 million. Compared with revenue of ¥50,794 million and operating profit of ¥5,976 million in the same period of the previous year, revenue increased 8.3% and operating profit increased 10.7%. Revenue was only 52.4% of the full-year forecast, while operating profit reached 63.0%, ordinary profit 63.8%, and net profit 63.3%, clearly putting profit progress ahead of revenue progress.

Profit margins are also an important point to monitor. Operating profit of ¥6,617 million divided by revenue of ¥55,003 million gives an operating margin of approximately 12.0%, up approximately 0.3 percentage points from approximately 11.8% based on operating profit of ¥5,976 million and revenue of ¥50,794 million in the same period of the previous year. The company attributes the increase in profit mainly to improved cost ratios throughout H1, but has not disclosed a factor-by-factor breakdown of changes in the cost of sales or selling, general and administrative expenses. In Q3, the focus will be on determining whether the improvement in the cost ratio is continuing or reflects the project mix and progress specific to H1, using the operating margin and segment profit margins.

The full-year forecasts are revenue of ¥105,000 million, operating profit of ¥10,500 million, ordinary profit of ¥10,500 million, and net profit of ¥7,000 million. As of H1, progress toward all of these forecasts appears to be ahead of plan for the first half. However, construction consulting earnings tend to fluctuate by quarter depending on project completion timing and project progress, so full-year achievement cannot be assessed based solely on H1 progress. In Q3, progress of approximately 75% for revenue and approximately 75% for operating profit will be used as benchmarks, while also checking whether the full-year forecasts have been revised.

The figures for H1 cash flow from operating activities and cash and cash equivalents at the end of the period were not disclosed as evaluated figures in the earnings report. From Q3 onward, it will also be necessary to check whether the increase in profit is accompanied by the collection of working capital, and whether cash conversion has been delayed by increases in contract assets or costs incurred on uncompleted contracts.