Accelerated fourth-quarter profit growth is needed to achieve the FY2026 full-year plan

Revenue for the nine months ended the third quarter of FY2026 was ¥157,805 million, down 3.2% year on year, while operating profit was ¥13,332 million, down 9.8%. The full-year forecasts remain unchanged at ¥220,000 million in revenue and ¥20,000 million in operating profit, putting nine-month progress at 71.7% for revenue and 66.7% for operating profit. Compared with the simple 75% benchmark based on the elapsed quarters, revenue was approximately 3.3 percentage points behind and operating profit approximately 8.3 percentage points behind.

To achieve the full-year forecasts, the company needs ¥62,195 million in revenue and ¥6,668 million in operating profit in the fourth quarter. This requires generating 28.3% of the full-year revenue forecast and 33.3% of the full-year operating profit forecast in the final quarter. Since the required progress for operating profit is heavier than for revenue, it will be necessary to confirm improvements in profitability, including rental rates, utilization and project mix, rather than simply a recovery in project volume.

In the previous fiscal year, revenue was ¥214,954 million and operating profit was ¥19,602 million. The company’s plan for the current fiscal year calls for revenue to increase 2.3% and operating profit 2.0% year on year, but cumulative nine-month results remain below the prior-year period. The company has attributed the declines in revenue and profit to the reactionary decline from special demand related to the Osaka-Kansai Expo and delays in starting new construction projects. With the final results, it will be important to determine which projects contributed to fourth-quarter revenue and profit and whether the amounts by factor will be disclosed.

In the evaluated information presented for the third-quarter results, the full-year forecast has not been revised, but nine-month EBITDA and the full-year outlook have not been set out. The medium-term management plan, “Next Stage 2026,” identifies reaching ¥220,000 million in revenue and ¥20,000 million in operating profit as important targets for the final year. Accordingly, the final results should disclose progress against the plan not only for operating profit but also for EBITDA, investment and ROI.