Sumitomo Forestry lowered its forecast for the year to December 2026 on 5 November, blaming US homebuyers who keep waiting on the sidelines. The same quarterly report shows how far the Tri Pointe Homes acquisition has reshaped the group: sales are up a fifth, and borrowings have grown sharply with the deal. For background on how the buyout was financed, see Earlier Tokyo Brief coverage.
The forecast cut
For the nine months to 30 September, sales rose 21.1% to ¥1.98tn, but operating profit fell 19.3% to ¥99.6bn, ordinary profit fell 39.7% to ¥77.2bn and profit attributable to owners of the parent fell 43.6% to ¥39.7bn.
Full-year guidance now stands at sales of ¥2.78tn (previously ¥2.95tn), operating profit of ¥125bn (previously ¥143bn) and ordinary profit of ¥92.5bn (previously ¥115bn). Net profit attributable to owners of the parent is unchanged at ¥60bn, or ¥97.85 a share, and the dividend forecast is unchanged at ¥50 for the year.
| Measure | Previous forecast | Revised forecast | Change |
|---|---|---|---|
| Sales | ¥2.95tn | ¥2.78tn | -5.8% |
| Operating profit | ¥143.0bn | ¥125.0bn | -12.6% |
| Ordinary profit | ¥115.0bn | ¥92.5bn | -19.6% |
| Net profit attributable to owners of the parent | ¥60.0bn | ¥60.0bn | Unchanged |
The company gave two reasons. In US detached housing, higher mortgage rates and economic uncertainty are keeping buyers on the sidelines, so it has built in fewer home sales and lower profitability. In US real estate, it expects fewer properties to be sold.
Where the damage shows
Overseas housing, the segment that contains Tri Pointe, reported sales of ¥1.16tn, up 33.4%, helped by the acquisition and a strong Australian housing market. Ordinary profit fell 33.8% to ¥71.2bn. The company cites acquisition-related costs that lifted selling and administrative expenses, buyers' wait-and-see stance, and incentives that cut margins.
The real estate segment swung deeper into loss, with an ordinary loss of ¥14.4bn against ¥8.5bn a year earlier. The company points to a valuation loss on some limited-partner investment projects and to later-than-planned sales of US and domestic development properties.
What the acquisition did to the balance sheet
Total assets rose by ¥1.01tn from the end of 2025 to ¥3.58tn, which the company attributes to Tri Pointe's consolidation lifting inventories and goodwill. Work-in-progress real estate stood at ¥1.29tn, against ¥756.6bn at the end of 2025. Goodwill reached ¥188.1bn from ¥35.5bn, and the company says ¥140.4bn of the increase relates to Tri Pointe. That figure is provisional because the purchase price allocation is not finished.
Liabilities rose by ¥964.1bn to ¥2.40tn, which the company ties to short-term borrowings, long-term borrowings and bonds taken on for the acquisition. Short-term borrowings reached ¥509.0bn from ¥140.8bn, non-current bonds ¥348.6bn from ¥50.3bn, and long-term borrowings ¥709.0bn from ¥532.2bn. Interest expense for the nine months was ¥16.6bn, against ¥9.0bn a year earlier. The equity ratio was 29.2%, against 39.0%.
The release does not quantify how much of the group's sales increase came from the Tri Pointe acquisition, and the company says its US housing line is the one under pressure. The quarterly report carries no auditor review, and the company says its forecasts are not a commitment and actual results may differ materially.