I would like to extend my sincerest appreciation for your patronage of TOKYO KEIKI.
In the first half of the fiscal year, the Japanese economy continued to showed signs of recovery in personal consumption due to improvements in the employment and income environment, as well as in capital investment driven by improved corporate earnings. However, the outlook remained uncertain due to downward pressure from continued inflation, with concerns growing over the increasing impact of factors such as the sluggish Chinese economy and the prolonged conflict in Ukraine, in addition to the effects of U.S. tariff policies, particularly on the automotive industry.
In this business environment, net sales for the first half of the fiscal year increased compared to the same period last year. This was primarily due to strong sales of avionics equipment and naval onboard equipment in the Defense & Communications Equipment Business, which were driven by increased Japanese national defense budgets, as well as sales growth in all other business segments. Operating profit returned to profitability from the first half, due to increased profits in the Defense & Communications Equipment Business. As a result, all line-item profits increased significantly year on year. Specifically, net sales increased by ¥3,843 million year-on-year to ¥24,425 million, and operating profit rose by ¥827 million to ¥722 million. Ordinary profit increased by ¥796 million to ¥825 million, and profit attributable to owners of the parent increased by ¥776 million to ¥839 million.
In addition, as our group has many transactions with government agencies and delivery schedules tend to be concentrated in the fourth quarter, revenue is typically recognized more heavily in the second half of the fiscal year.
Regarding the consolidated financial results forecasts for the fiscal year ending March 31, 2026, compared to the forecast announced on May 12, net sales are now expected to exceed the previous forecast. This is due to the smooth progress of equipment deliveries to the Japan Ministry of Defense in the Defense & Communications Equipment Business, as well as the continued strong performance in sales of equipment for newly built vessels in the Marine Systems Business. Regarding profits, operating profit is now expected to exceed the previously announced forecast due to increased sales in the Marine Systems Business. Based on these factors, the consolidated financial results forecasts have been revised as follows.
We now expect net sales to increase by \700 million to ¥60,300 million, operating profit is expected to rise by ¥110 million to ¥4,000 million, ordinary profit is forecast to grow by ¥150 million to ¥4,060 million, and profit attributable to owners of the parent is anticipated to increase by ¥400 million to ¥2,860 million.
Furthermore, following a detailed review, the costs previously recorded as estimates relating to the head office relocation have been reflected in this revision.
For the dividend for the current fiscal year, we plan to increase the ordinary dividend by ¥5 to ¥40.00 per share.
We hope that all of our stakeholders will continue to provide further support and guidance.