During the six months ended June 30, 2026, although escalating tensions in the Middle East pushed energy prices higher, the global economy showed a gradual recovery, supported by factors such as expansion of AI-related demand. In the United States, although prices surged against the backdrop of factors such as escalating tensions in the Middle East, the economy expanded gradually, supported by robust AI related investment and higher consumer spending. In Europe, the economy trended weaker due to factors such as surging prices driven by rising energy prices. In China, while exports remained strong, domestic demand remained sluggish amid factors such as the real estate market slump and deteriorating consumer spending, resulting in an economic slowdown. In Japan, although the situation in the Middle East had some impact, the economy recovered modestly, supported by a recovery in exports and production as well as improvements in the income environment.
Under these conditions, during the six months ended June 30, 2026, product demand stayed solid in the Industrial Materials segment in the field of decorations and in the Medical segment. On the other hand, in the Devices segment, product demand for tablets declined significantly, and net sales decreased, compared to the same period of the previous year. As disclosed in the “Notice Regarding Postponement of Announcement of Financial Results for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2026 and Consideration of Application for Extension of the Filing Deadline for the Semi-Annual Securities Report” dated August 4, 2026, it came to light that inappropriate accounting treatments centered on circular transactions had been carried out at USM HEALTHCARE MEDICAL DEVICES FACTORY JOINT STOCK COMPANY ("USM") prior to our acquisition of USM on May 20, 2026. Subsequently, as disclosed in the “Notice Regarding Transfer of Shares Involving a Change in Consolidated Subsidiary (Specified Subsidiary)” dated September 4, 2026, we decided to transfer its shares in USM. Furthermore, as disclosed in the “Notice of the Recording of Impairment Loss on Goodwill in Consolidated Financial Results and Loss on Valuation of Shares of Subsidiaries and Associates in Non-consolidated Financial Results” dated September 30, 2026, we recognized an impairment loss on goodwill related to USM based on the results of an impairment test conducted in accordance with International Financial Reporting Standards (IFRS) in connection with the transfer of the USM shares, and recorded an operating loss for the six months ended June 30, 2026.
As a result, regarding the financial results for the six months ended June 30, 2026, net sales were ¥96,033 million (a decrease of 1.0% as compared to the same period of the previous year), operating loss was ¥4,500 million (operating profit of ¥2,558 million in the previous year) and loss attributable to owners of parent was ¥5,473 million (profit attributable to owners of parent of ¥20 million in the previous year).