Sekisui House Lifts Half-Year Operating Profit 16% as Development Profit More Than Doubles, Offsetting a U.S. Homebuilding Slump

Revenue down 2.5%, operating profit up 16%: the mix did the work

Sekisui House, Ltd. (TSE: 1928), the homebuilder and property group whose businesses run from custom-built detached houses and rental housing to remodeling, condominiums, urban redevelopment and U.S. homebuilding, published consolidated first-half results for the six months from February 1 to July 31, 2026 on September 10, 2026 under Japanese GAAP. Revenue fell 2.5% to ¥1,965,644 million, but operating profit rose 16.0% to ¥180,370 million, ordinary profit 23.8% to ¥169,081 million and profit attributable to owners of the parent 23.1% to ¥125,053 million, for earnings of ¥192.90 per share against ¥156.76. The company is listed on the Tokyo and Nagoya stock exchanges.

Cost of sales fell 5.0% to ¥1,536,852 million, twice the rate at which revenue fell, so gross profit rose 7.6% to ¥428,791 million and the gross margin widened from 19.8% to 21.8%. Selling, general and administrative expenses rose only 2.2% to ¥248,421 million, and the operating margin moved from 7.7% to 9.2%. The filing gives no group-level explanation of the margin gain, but the segment table is consistent with a change in mix: international revenue shrank by ¥128,028 million while the higher-margin development businesses added ¥72,960 million.

Currency and equity-method income added below the operating line

Non-operating income rose to ¥14,163 million from ¥8,037 million, including a foreign-exchange gain of ¥3,801 million against a ¥1,977 million exchange loss a year earlier and equity-method investment income of ¥4,739 million against ¥1,961 million, while interest expense rose to ¥20,187 million from ¥18,889 million. That is why ordinary profit grew faster than operating profit. A ¥12,643 million gain on the sale of investment securities (¥11,591 million a year earlier) was the only material extraordinary item, and pre-tax profit rose 22.7% to ¥181,382 million, with income taxes up 23.1% to ¥54,251 million. Comprehensive income was ¥158,303 million against −¥19,356 million, chiefly because the foreign-currency translation adjustment swung to +¥43,110 million from −¥110,510 million.

Development profit more than doubled

The three development segments together grew revenue 24.9% to ¥366,090 million and operating profit 114.1% to ¥59,865 million, lifting their margin from 9.5% to 16.4%. Urban Redevelopment did most of it: revenue rose 176.2% to ¥98,416 million and profit 437.7% to ¥27,352 million on the sale of six properties to Sekisui House REIT, including the Prime Maison Yoga Kinuta Park urban rental condominium in Tokyo. Condominiums took less revenue, ¥56,184 million, down 2.3%, yet profit rose 83.8% to ¥15,742 million and the margin almost doubled to 28.0% as handovers at Grand Green Osaka THE NORTH RESIDENCE and Grand Maison Shibuya Oyamacho went to plan. Real Estate Brokerage and Property grew revenue 5.7% to ¥211,490 million and profit 17.2% to ¥16,771 million on steady sales of property held for sale, mainly residential land.

One caution on those comparisons: from this half the company moved some consolidated subsidiaries previously reported under Other into Urban Redevelopment and revised how corporate costs are allocated, and it restated the prior-year segment figures on the new basis. The growth rates above are on that restated basis.

U.S. homebuilding: fewer homes sold, profit almost gone

International revenue fell 20.8% to ¥486,353 million and segment operating profit 93.2% to ¥1,036 million, a margin of 0.2% against 2.5%. In U.S. homebuilding, the filing says sales and deliveries fell as customers kept waiting on the sidelines amid uncertainty about the U.S. economy, and that sales incentives also weighed; the business has been run since January 2026 as one company under SEKISUI HOUSE U.S., Inc. U.S. community development sold steadily, including properties acquired in 2025. U.S. rental development faced a comparison with property sales a year earlier, but the company signed sale contracts for four properties, including the residential portions of The Ayer in Seattle and West in San Diego, and completed their handover in July 2026, to be booked in the third quarter. International orders rose 20.3% to ¥794,669 million, and its backlog more than doubled to ¥603,415 million from ¥295,099 million at January 31.

Built-to-order work slipped; the stock businesses grew

The three built-to-order segments together took revenue of ¥660,133 million, down 2.3%, and operating profit of ¥75,693 million, down 1.6%. Detached Houses fell 1.1% to ¥244,168 million, with profit down 5.2% to ¥23,990 million: the company describes buyer sentiment softening under rising mortgage rates, construction costs and further inflation triggered by Middle East tensions, but says government housing support kept inquiries broadly stable. Rental Housing and Commercial Buildings fell 1.9% to ¥264,951 million with profit flat at ¥36,665 million, and Architectural and Civil Engineering fell 5.0% to ¥151,013 million against large projects a year earlier, though higher-margin additional and change orders kept profit up 0.5% at ¥15,036 million.

The stock businesses grew revenue 4.9% to ¥472,783 million and profit 13.3% to ¥56,781 million. Rental Housing Management rose 2.9% to ¥368,016 million, with profit up 12.7% to ¥41,745 million, and Remodeling rose 12.8% to ¥104,766 million, with profit up 14.8% to ¥15,035 million, on large renovations and subsidy-backed energy-saving work. Group orders rose 9.3% to ¥2,324,930 million, and the order backlog stood at ¥2,163,704 million against ¥1,804,417 million at January 31, up 19.9%.

The balance sheet grew on property held for sale

Total assets rose by ¥108,682 million to ¥5,115,320 million, which the filing attributes mainly to more real estate for sale: land for sale rose to ¥1,628,904 million from ¥1,507,781 million and buildings for sale to ¥1,149,667 million from ¥1,093,574 million. Part of that is a reclassification, not new purchases, since ¥39,713 million of investment property was transferred into buildings and land for sale after a change in holding purpose. Liabilities fell by ¥6,072 million to ¥2,812,327 million, mainly on tax payments, and net assets rose by ¥114,754 million to ¥2,302,992 million on profit and a larger translation adjustment despite dividend payments, lifting the equity ratio from 42.7% to 44.0%. Issued shares fell to 651,585,566 from 663,122,166, and treasury shares to 3,182,159 from 14,884,740.

Guidance: less revenue, the same operating profit, more net profit

Sekisui House revised the full-year FY1/2027 forecast it published on March 5, 2026, citing first-half progress and its outlook. It now expects revenue of ¥4,260,000 million, ¥93,000 million or 2.1% below the previous ¥4,353,000 million and 1.5% above the prior year; operating profit is unchanged at ¥350,000 million (+2.5%); ordinary profit is raised to ¥316,000 million from ¥314,000 million (−3.6% year on year); and profit attributable to owners is raised to ¥224,000 million from ¥218,000 million (−3.5%), for earnings per share of ¥345.55 against ¥336.30 previously. The filing gives no segment-by-segment reason for the revenue cut.

The first half delivered 46.1% of guided revenue, 51.5% of guided operating profit and 55.8% of guided net profit. That leaves an implied second-half operating profit of about ¥169,630 million, against ¥180,370 million just booked and roughly ¥185,929 million in the second half of FY1/2026, a period that will include the four U.S. property sales due in the third quarter. The dividend forecast was not revised: an interim ¥72.00 will be paid from September 30, 2026, with ¥73.00 forecast at the year-end, for an annual ¥145.00 against ¥144.00, about 42% of guided earnings per share.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.