Against the backdrop of a weak U.S. housing market, Sekisui House posted record-high interim profit, while Sumitomo Forestry faced poor performance in its U.S. business and a downward revision to its full-year outlook. We examine the prospects for recovery, together with the investment case for the U.S.
Sekisui House announced its interim results for the fiscal year ending January 2027. Revenue fell 2.5% year on year to ¥1.9656 trillion, while operating profit rose 16.0% to ¥180.3 billion, setting a record high for an interim period. Operating profit from the urban redevelopment business surged to ¥27.3 billion, approximately 5.4 times the previous year's level, while strong performance in the rental housing management business also lifted overall profit.
Meanwhile, Sumitomo Forestry's revenue for the interim period of the fiscal year ending December 2026 increased to ¥1.2632 trillion, 1.75 times the previous year's level, but operating profit fell 28.4% from the previous fiscal year to ¥59.9 billion, and net profit declined 45.5% to ¥26.8 billion, resulting in a substantial drop in profit. Operating profit from its U.S. housing business shrank 40.9% year on year to ¥32.6 billion, affected by high interest rates in the United States.
Sumitomo Forestry revised its full-year operating profit forecast down from ¥157.0 billion to ¥143.0 billion. Meanwhile, although Sekisui House continues to support earnings with its domestic business, weakness in the U.S. market continues to weigh on the performance of both companies. On the next page, we examine the current state of U.S. interest rates and assess the next investment opportunities for the 2 companies.
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