Performance Review

[Based on Japanese GAAP]

FY2025 2Q Consolidated Financial Overview

Operating Results

Overview of Operating Results

• Net sales

  35,253 million yen

  YOY
  8.9%

• Operating profit

  2,649 million yen

  YOY
  (20.8)%

• Ordinary profit

  2,660 million yen

  YOY
  (19.7)%

• Profit attributable to owners of parent

  2,226 million yen

  YOY
  (13.0)%

• Earnings per share

  78.49 yen

  YOY
  (13.1)%

During the current interim consolidated accounting period, while the domestic economy continued to recover gradually due to improvements in employment and income environments, the outlook remained uncertain due to factors such as continued price increases, developments in U.S. trade policies, and the prolonged situations in Ukraine and the Middle East. In addition, the pharmaceuticals business, which is the core of our Group, continued to face a difficult operating environment due to the impact of ongoing policies to control medical expenses, such as annual NHI drug price revisions. In the Group’s business, however, net sales increased by 2,881 million yen year on year (YoY) to 35,253 million yen (up 8.9% YoY) due to growth in the pharmaceutical and veterinary pharmaceutical businesses. On the other hand, due in part to the increase in R&D costs etc., operating profit decreased to 2,649 million yen (down 20.8% YoY) and ordinary profit decreased to 2,660 million yen (down 19.7% YoY), and profit attributable to owners of parent decreased to 2,226 million yen (down 13.0% YoY), all showing a decline in profits.

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields: internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall, despite the impact of annual NHI drug price revisions. A look at results by product demonstrates that the outcomes within the field of obstetrics and gynecology have been primarily driven by the consistent growth of the uterine fibroid and endometriosis agent RELUMINA (relugolix), which reached 5,692 million yen (up 5.2% YoY), and the dysmenorrhea agent DroEthi (drospirenone/ethinylestradiol) continued to significantly contribute to performance following the previous year, with sales of 4,109 million yen (up 14.5% YoY). Sales also grew steadily in the internal medicine area, as sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 4,306 million yen (up 6.3% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) to 3,880 million yen (up 20.2% YoY), reflecting the positive impact of the NHI drug price revision. In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN were 1,908 million yen (down 6.3% YoY).
As a result of the above factors, the segment sales were 29,255 million yen (up 2.2% YoY), and the segment profit was 3,119 million yen (down 18.4% YoY), mainly due to an increase in R&D expenses and other costs.

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, were 3,765 million yen (up 3.4% YoY), mainly due to increased sales in veterinary pharmaceuticals. Segment profit also increased to 282 million yen (up 59.7% YoY).

(iii) Overseas businesses
"Overseas business", a new reportable segment, was added following the consolidation of Ha Tay Pharmaceutical Joint Stock Company, a Vietnamese pharmaceutical company, as a consolidated subsidiary in the previous consolidated fiscal year. For the overseas business, segment sales were 2,133 million yen and segment profit was 132 million yen.

(iv) Other businesses
Sales results for other businesses, which include clinical testing and medical devices, grew to 99 million yen (down 11.8% YoY). Segment loss was 15 million yen (vs. a loss of 4 million yen in the same period of the previous year).

Financial Position

Overview of Financial Position Summary

• Total assets

  108,773 million yen

  Change from end of previous fiscal year
  4.7%

• Net assets

  72,594 million yen

  Change from end of previous fiscal year
  1.5%

• Equity ratio

  61.5 ％

  Change from end of previous fiscal year
  (1.4)point

Overview of Financial Position

(Assets)
Total assets at the end of the current interim consolidated accounting period stood at 108,773 million yen, up 4,884 million yen from the end of the previous consolidated fiscal year. This figure was due mainly to increases in securities, and accounts receivable-trade.

(Liabilities)
Total liabilities at the end of the current interim consolidated accounting period stood at 36,178 million yen, up 3,845 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to increases in long-term borrowings, and accounts payable-trade.

(Net assets)
Total assets at the end of the current interim consolidated accounting period stood at 72,594 million yen, up 1,038 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to retained earnings resulting from the recording of profit attributable to owners of parent and an increase in valuation difference on available-for-sale securities.
The resulting equity ratio was 61.5%, down 1.4 percentage points from the end of the previous consolidated fiscal year.

Cash Flow Summary

• Cash flows from operating activities

  1,105 million yen

• Cash flows from investing activities

  (5,959) million yen

• Cash flows from financing activities

  (1,382) million yen

• Cash and cash equivalents at end of period

  7,062 million yen

Overview of Cash Flow Position

The balance of cash and cash equivalents (hereinafter referred to as “Net cash”) at the end of the current interim consolidated accounting period stood at 7,062 million yen, a decrease of 3,540 million yen from the end of the previous consolidated fiscal year.
The standing of each type of cash flow for the current interim consolidated accounting period, and major contributing factors of each, are summarized below.

(Cash flows from operating activities)
Net cash provided by operating activities was 1,105 million yen (vs. a gain of 1,159 million yen in the same period of the previous fiscal year). This was due mainly to the recording of interim net income before income taxes and depreciation, despite decreases in trade payables and increases in trade receivables.

(Cash flows from investing activities)
Net cash used in investing activities was 5,959 million yen (vs. a loss of 1,783 million yen in the same period of the previous fiscal year). This was due mainly to the acquisition of shares of subsidiaries and associates, and of property, plant and equipment.

(Cash flows from financing activities)
Net cash provided by financing activities was 1,382 million yen (vs. a loss of 2,406 million yen in the same period of the previous year). This was due mainly to proceeds from long-term borrowings.

FY2025 1Q Consolidated Financial Overview

Operating Results

Overview of Operating Results

• Net sales

  17,641 million yen

  YOY
  7.9%

• Operating profit

  1,479 million yen

  YOY
  (15.9)%

• Ordinary profit

  1,620 million yen

  YOY
  (10.6)%

• Profit attributable to owners of parent

  1,244 million yen

  YOY
  (2.3)%

• Earnings per share

  43.88 yen

  YOY
  (2.4)%

During the first quarter of the consolidated fiscal year, although the domestic economy is expected to recover gradually due to improvements in the employment and income environment and the effects of various policies, the outlook remains uncertain due to downside risks to the economy from the impact of U.S. trade policies and rising raw material and resource prices. In the ethical pharmaceuticals business, which constitutes the core of the Group, the business environment remained severe, partly due to the impact of the annual NHI drug price revisions. However, the Group's net sales increased by 1,289 million yen YoY to 17,641 million yen (up 7.9% YoY) due to the steady performance of the pharmaceutical and veterinary pharmaceutical businesses, as well as the conversion of a Vietnamese pharmaceutical company, an equity method affiliate, into a consolidated subsidiary. On the profit side, however, due to an increase in R&D expenses, operating profit was 1,479 million yen (down 15.9% YoY), ordinary profit was 1,620 million yen (down 10.6% YoY), and profit attributable to owners of parent was 1,244 million yen (down 2.3% YoY).

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields of internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall despite the impact of the annual NHI drug price revisions. A look at results by product shows that results in the obstetrics and gynecology area were driven by the growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 2,768 million yen (up 4.7% YoY). In addition to these, sales of the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol) increased significantly to 2,022 million yen (up 16.0% YoY), following the previous year. In the internal medicine area, sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 2,125 million yen (up 2.3% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) increased to 1,902 million yen (up 15.6% YoY) partly due to the positive revision of the NHI drug price. In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN (leuprorelin) were 962 million yen (down 5.7% YoY).
As a result of the above factors, the segment sales were 14,515 million yen (up 0.2% YoY), and the segment profit was 1,698 million yen (down 15.6% YoY) due to an increase in R&D expenses.

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, were 1,841 million yen (up 2.2% YoY). The segment profit was 128 million yen (up 75.2% YoY).

(iii) Overseas businesses
"Overseas business", a new reportable segment, was added following the consolidation of Ha Tay Pharmaceutical Joint Stock Company, a Vietnamese pharmaceutical company, as a consolidated subsidiary in the previous consolidated fiscal year. For the overseas business, sales were 1,226 million yen and segment profit was 73 million yen.

(iv) Other businesses
Sales of the other businesses, which include clinical testing, medical devices, etc., were 58 million yen (up 0.3% YoY). However, the segment loss was 2 million yen (vs. a loss of 5 million yen in the same period of the previous year).

Financial Position

Overview of Financial Position Summary

• Total assets

  102,952 million yen

  Change from end of previous fiscal year
  2.4%

• Net assets

  69,231 million yen

  Change from end of previous fiscal year
  0.1%

• Equity ratio

  63.6 ％

  Change from end of previous fiscal year
  (1.4)point

Overview of Financial Position

(Assets)
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at 102,952 million yen, up 2,417 million yen from the end of the previous consolidated fiscal year under review. This figure was due primarily to increases in property, plant and equipment, and investment securities.

(Liabilities)
Total liabilities at the end of the first quarter of the consolidated fiscal year under review stood at 33,721 million yen, up 2,382 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to increases in other in current liabilities, long-term borrowings.

(Net assets)
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at 69,231 million yen, up 35 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.
The resulting equity ratio was 63.6%, down 1.4 percentage points from the end of the previous consolidated fiscal year.

FY2024 Consolidated Financial Overview

Operating Results

Operating Results Summary

• Net sales

  64,139 million yen

  YOY
  2.1%

• Operating profit

  5,331 million yen

  YOY
  (18.0)%

• Ordinary profit

  5,107 million yen

  YOY
  (21.7)%

• Profit attributable to owners of parent

  5,101 million yen

  YOY
  (32.4)%

• Earnings per share

  179.95 yen

  YOY
  (32.5)%

The Group’s net sales in the consolidated fiscal year under review were 64,139 million yen, up 1,296 million yen year on year (YoY). This was mainly due to an increase in sales in the pharmaceutical business, which saw strong sales of products in the obstetrics and gynecology field, and an increase in sales in the animal health business, which saw growth in the feed additive product line. Cost of sales was 32,803 million yen, and cost of sales ratio was down 0.1% YoY, resulting in an increase of 670 million yen in gross profit YoY to 31,335 million yen. At the same time, selling, general and administrative expenses increased by 1,839 million yen YoY to 26,003 million yen owing to the impact of increased expenses for the progress in research and development. As a result, operating profit decreased by 1,168 million yen YoY to 5,331 million yen. Ordinary profit was 5,107 million yen, after recording 398 million yen in non-operating income and 622 million yen in non-operating expenses. Profit attributable to owners of parent in the consolidated fiscal year under review was 5,101 million yen due to extraordinary gains of 127 million yen on the sale of investment securities, gains of 1,257 million yen from subsidiary-related profit and loss of Ha Tay Pharmaceutical Joint Stock Company, a Vietnamese pharmaceutical company that was an equity method affiliate, along with consolidation as a consolidated subsidiary, and extraordinary losses of 300 million yen on the impairment of intangible assets. Compared to the same period of the previous fiscal year, Profit attributable to owners of parent decreased by 2,444 million yen owing to a reaction to the recording of extraordinary gains from the sale of investment securities.

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields: internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall, despite the impact of the NHI drug price revisions. A look at results by product shows that the results in the field of obstetrics and gynecology were driven by the large-scale growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 10,531 million yen (up 6.3% YoY), and the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol), which went on sale in June 2022, largely drove performance with sales of 7,502 million yen (up 22.5% YoY). Sales also grew in the internal medicine area, as sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 8,113 million yen (up 3.2% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) to 6,455 million yen (up 10.1% YoY). In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN (leuprorelin) were 4,003 million yen (down 9.6% YoY).
As a result of the above factors, the segment sales were 56,655 million yen (up 1.1% YoY), and segment profit was 6,349 million yen (down 17.0% YoY).

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, were 7,246 million yen (up 8.7% YoY), and the segment profit was 300 million yen (up 53.7% YoY) because feed additives and other products turned to an increase in earnings and sales of veterinary pharmaceuticals increased.

(iii) Other businesses
Sales of other businesses, which include clinical testing, medical devices, were 237 million yen (up 45.8% YoY). Segment profit was 2 million yen (vs. a loss of 125 million yen in the same period of the previous year).

Financial Position

Financial Position Summary

• Total assets

  100,534
  million yen

  YOY
  10.8%

• Net assets

  69,195
  million yen

  YOY
  11.7%

• Equity ratio

  65.0 ％

  YOY
  (3.2)point

Overview of Financial Position

(Assets)
Total assets at the end of the consolidated fiscal year under review stood at 100,534 million yen, up 9,789 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to increases in construction in progress and goodwill despite decreases investment securities, and cash and deposits.

(Liabilities)
Total liabilities at the end of the consolidated fiscal year under review stood at 31,339 million yen, up 2,523 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to decreases in income taxes payable despite increases in accounts payable - trade and short-term borrowings.

(Net assets)
Total assets at the end of the consolidated fiscal year under review stood at 69,195 million yen, up 7,265 million yen from the end of the consolidated fiscal previous year. This figure was due primarily to an increase in retained earnings resulting from the recording of non-controlling interests and profit attributable to owners of parent.

The equity ratio was 65.0%, down 3.2 percentage points from the end of the previous consolidated fiscal year.

Cash Flow Summary

• Cash flows from operating activities

  2,485 million yen

• Cash flows from investing activities

  (6,124) million yen

• Cash flows from financing activities

  (2,956) million yen

• Cash and cash equivalents at end of period

  10,603 million yen

Overview of Cash Flow Position

The balance of cash and cash equivalents at the end of the current consolidated fiscal year stood at 10,603 million yen, down 6,135 million yen from the end of the previous consolidated fiscal year.
The standing of each type of cash flow for the current fiscal year, and major contributing factors of each, are summarized below.

(Cash flows from operating activities)
Net cash provided by operating activities was 2,485 million yen (vs. a gain of 1,486 million yen in the same period of the previous year), due mainly to the recording of profit before income taxes, despite a decrease in amount of income taxes.

(Cash flows from investing activities)
Net cash used in investing activities was 6,124 million yen (vs. a gain of 1,706 million yen in the same period of the previous year). This was due mainly to a gain of property, plant and equipment.

(Cash flows from financing activities)
Net cash used in financing activities was 2,956 million yen (vs. a loss of 3,943 million yen in the same period of the previous year). This was due mainly to repayments of long-term borrowings.

FY2024 3Q Consolidated Financial Overview

Operating Results

Overview of Operating Results

• Net sales

  49,926 million yen

  YOY
  2.3%

• Operating profit

  5,495 million yen

  YOY
  (0.6%)

• Ordinary profit

  5,446 million yen

  YOY
  (3.3%)

• Profit attributable to owners of parent

  4,098 million yen

  YOY
  (36.5%)

• Earnings per share

  144.59 yen

  YOY
  (36.6%)

During the third quarter of the consolidated fiscal year, despite a gradual return to normal in economic activities due to improvements in the employment and income environment, the outlook remained uncertain as a result of factors such as rising prices of energy and raw materials due to the unstable international situation. In the pharmaceutical business, the core of the Group, the business environment remains challenging due to factors such as the impact of annual NHI drug price revisions. However, the Group's pharmaceutical and animal health businesses continued to grow, resulting in net sales of 49,926 million yen (up 2.3% YoY), an increase of 1,101 million yen from the same period of the previous fiscal year. In terms of profits, despite an increase in SG&A expenses, mainly R&D expenses, an increase in gross profit due to the increase in sales resulted in operating profit of 5,495 million yen (down 0.6% YoY) and ordinary profit of 5,446 million yen (down 3.3% YoY), which were almost the same level as the same period of the previous year. On the other hand, profit attributable to owners of parent was 4,098 million yen (down 36.5% YoY), down 2,359 million yen from the same period of the previous year, due to reaction to the recording of a gain on sales of investment securities as extraordinary income in the previous year.

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields of internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall despite the impact of the periodical NHI drug price revisions. A look at results by product shows that results in the obstetrics and gynecology area were driven by the growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 8,331 million yen (up 5.8% YoY). In addition to these, sales of the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol) increased significantly to 5,673 million yen (up 23.2% YoY), following the previous year. In the internal medicine area, sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 6,207 million yen (up 1.7% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) increased to 4,919 million yen (up 7.6% YoY). In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN were 3,104 million yen (down 10.7% YoY).
As a result of the above factors, the segment sales were 44,055 million yen (up 1.0% YoY), and the segment profit was 6,203 million yen (down 2.3% YoY).

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, were 5,703 million yen (up 11.9% YoY). The segment profit was 300 million yen (up 60.9% YoY).

(iii) Other businesses
Sales of the other businesses, which include clinical testing, medical devices, etc., were 166 million yen (up 33.6% YoY). However, the segment loss was 25 million yen (vs. a loss of 103 million yen in the same period of the previous year).

Financial Position

Overview of Financial Position Summay

• Total assets

  91,486 million yen

  Change from end of previous fiscal year
  0.8%

• Net assets

  65,191 million yen

  Change from end of previous fiscal year
  5.3%

• Equity ratio

  71.3 ％

  Change from end of previous fiscal year
  3.1point

Overview of Financial Position

(Assets)
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at 91,486 million yen, up 741 million yen from the end of the previous consolidated fiscal year under review. This figure was due primarily to increases in investment securities, raw materials and supplies, and property, plant and equipment despite decreases in cash and deposits, and securities.

(Liabilities)
Total liabilities at the end of the third quarter of the consolidated fiscal year under review stood at 26,294 million yen, down 2,520 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to decreases in other in current liabilities, short-term borrowings and long-term borrowings despite increases in other in non-current assets and accounts payable - trade.

(Net assets)
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at 65,191 million yen, up 3,261 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.
The resulting equity ratio was 71.3%, up 3.1 percentage points from the end of the previous consolidated fiscal year.

FY2024 2Q Consolidated Financial Overview

Operating Results

Overview of Operating Results

• Net sales

  32,371 million yen

  YOY
  2.3%

• Operating profit

  3,345 million yen

  YOY
  9.5%

• Ordinary profit

  3,312 million yen

  YOY
  7.0%

• Profit attributable to owners of parent

  2,560 million yen

  YOY
  (38.0%)

• Earnings per share

  90.36 yen

  YOY
  (38.0%)

During the current interim consolidated accounting period, while economic activity is recovering, the outlook remains uncertain due to continuing heightened geopolitical risks and rising raw material and resource prices. In addition, the pharmaceuticals business, which is the core of our Group, continued to face a difficult operating environment due in part to the impact of annual NHI drug price revisions. In the Group’s business, however, net sales increased by 722 million yen year on year (YoY) to 32,371 million yen (up 2.3% YoY) due to growth in the pharmaceuticals business and the veterinary pharmaceuticals business. In terms of profits, despite an increase in expenses such as R&D expenses, operating profit was 3,345 million yen (up 9.5% YoY) and ordinary profit was 3,312 million yen (up 7.0% YoY), both of which were up from the same period of the previous year since efforts were made to improve costs. On the other hand, profit attributable to owners of parent was down 1,569 million yen YoY to 2,560 million yen (down 38.0% YoY) due to the retraction of gains on sales of investment securities recorded as extraordinary income in the previous year.

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields: internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall, despite the impact of annual NHI drug price revisions. A look at results by product shows that the results in the field of obstetrics and gynecology were driven by the steady growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 5,413 million yen (up 4.4% YoY), and the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol), continued to significantly drive performance from the previous year with sales of 3,589 million yen (up 23.3% YoY). Sales also grew steadily in the internal medicine area, as sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 4,052 million yen (up 1.3% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) to 3,227 million yen (up 7.7% YoY). In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN were 2,037 million yen (down 12.2% YoY). As a result of the above factors, the segment sales were 28,617 million yen (up 0.7% YoY), and the segment profit was 3,825 million yen (up 4.6% YoY).

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, largely increased to 3,640 million yen (up 15.1% YoY), mainly from feed additives and companion animal pharmaceuticals. Therefore, segment profit was 177 million yen (up 293.8% YoY) due to higher sales.

(iii) Other businesses
Sales results for other businesses, which include clinical testing and medical devices, grew to 113 million yen (up 39.9% YoY). Segment loss was 4 million yen (vs. a loss of 61 million yen in the same period of the previous year).

Financial Position

Overview of Financial Position Summary

• Total assets

  88,263 million yen

  Change from end of previous fiscal year
  (2.7%)

• Net assets

  64,192 million yen

  Change from end of previous fiscal year
  3.7%

• Equity ratio

  72.7 ％

  Change from end of previous fiscal year
  4.5point

Overview of Financial Position

(Assets)
Total assets at the end of the current interim consolidated accounting period stood at 88,263 million yen, down 2,481 million yen from the end of the previous consolidated fiscal year. This figure was due mainly to a decrease in securities and cash and deposits, despite an increase in raw materials and supplies, and property, plant and equipment.

(Liabilities)
Total liabilities at the end of the current interim consolidated accounting period stood at 24,070 million yen, down 4,744 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to a decrease in income taxes payable, short-term borrowings and long-term borrowings, despite an increase in other non-current liabilities.

(Net assets)
Total assets at the end of the current interim consolidated accounting period stood at 64,192 million yen, up 2,262 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.
The resulting equity ratio was 72.7%, up 4.5 percentage points from the end of the previous consolidated fiscal year.

Cash Flow Summary

• Cash flows from operating activities

  1,159 million yen

• Cash flows from investing activities

  (1,783) million yen

• Cash flows from financing activities

  (2,406) million yen

• Cash and cash equivalents at end of period

  13,705 million yen

Overview of Cash Flow Position

The balance of cash and cash equivalents (hereinafter referred to as “Net cash”) at the end of the current interim consolidated accounting period stood at 13,705 million yen, down 3,033 million yen from the end of the previous consolidated fiscal year.

The standing of each type of cash flow for the current interim consolidated accounting period, and major contributing factors of each, are summarized below.

(Cash flows from operating activities)
Net cash provided by operating activities was 1,159 million yen (vs. a gain of 3,097 million yen in the same period of the previous fiscal year). This was due mainly to the recording of interim net income before income taxes and depreciation, despite the payment of income taxes and a decrease in notes and accounts payable.

(Cash flows from investing activities)
Net cash used in investing activities was 1,783 million yen (vs. a gain of 1,382 million yen in the same period of the previous fiscal year). This was due mainly to the acquisition of property, plant and equipment.

(Cash flows from financing activities)
Net cash used in financing activities was 2,406 million yen (vs. a loss of 2,539 million yen in the same period of the previous year). This was due mainly to repayments of long-term borrowings.

FY2024 1Q Consolidated Financial Overview

Operating Results

Overview of Operating Results

• Net sales

  16,352 million yen

  YOY
  2.1%

• Operating profit

  1,758 million yen

  YOY
  3.1%

• Ordinary profit

  1,813 million yen

  YOY
  0.2%

• Profit attributable to owners of parent

  1,273 million yen

  YOY
  (10.9%)

• Earnings per share

  44.95 yen

  YOY
  (11.0%)

During the first quarter of the consolidated fiscal year, despite a gradual return to normal in economic activities, future prospects remained uncertain as a result of factors such as due to the ongoing geopolitical risks, decreased value of the yen on international currency markets and rising prices of energy and raw materials. Even under such conditions, however, the favorable trend in the Group's businesses continued from the previous fiscal year. Thus, both sales and profit increased from the same period of the previous year. However, the Group's business grew due to the growth of the pharmaceutical business and veterinary pharmaceutical business, resulting in net sales of 16,352 million yen (up 2.1% YoY), an increase of 329 million yen from the same period of the previous fiscal year. On the profit front, operating profit increased to 1,758 million yen (up 3.1% YoY) and ordinary profit rose to 1,813 million yen (up 0.2% YoY) due to cost improvement efforts despite an increase in R&D and other expenses. On the other hand, profit attributable to owners of parent was 1,273 million yen (down 10.9% YoY), down 155 million yen from the same period of the previous year, due to an increase in income taxes as well as reaction to the recording of a gain on sales of investment securities as extraordinary income in the previous year.

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields of internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall despite the impact of the periodical NHI drug price revisions. A look at results by product shows that results in the obstetrics and gynecology area were driven by the growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 2,644 million yen (up 2.6% YoY). In addition to these, sales of the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol) increased significantly to 1,743 million yen (up 24.5% YoY), following the previous year. In the internal medicine area, sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 2,076 million yen (up 0.7% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) increased to 1,645 million yen (up 7.9% YoY). In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN were 1,021 million yen (down 14.3% YoY).
As a result of the above factors, the segment sales were 14,493 million yen (up 0.5% YoY), and the segment profit was 2,012 million yen (down 0.5% YoY). 

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, were 1,800 million yen (up 15.4% YoY). The segment profit was 73 million yen (vs. a loss of 1 million yen in the same period of the previous year).

(iii) Other businesses
Sales of the other businesses, which include clinical testing, medical devices, etc., were 57 million yen (up 37.6% YoY). However, the segment loss was 5 million yen (vs. a loss of 27 million yen in the same period of the previous year).

Financial Position

Overview of Financial Position Summary

• Total assets

  87,321 million yen

  Change from end of previous fiscal year
  (3.8%)

• Net assets

  63,329 million yen

  Change from end of previous fiscal year
  2.3%

• Equity ratio

  72.5 ％

  Change from end of previous fiscal year
  4.3point

Overview of Financial Position

(Assets)
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at 87,321 million yen, down 3,423 million yen from the end of the previous consolidated fiscal year under review. This figure was due primarily to decreases in cash and deposits, and securities.

(Liabilities)
Total liabilities at the end of the first quarter of the consolidated fiscal year under review stood at 23,992 million yen, down 4,822 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to decreases in other in current liabilities, short-term borrowings and long-term borrowings.

(Net assets)
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at 63,329 million yen, up 1,398 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to an increase in retained earnings resulting from the recording of profit attributable to owners of parent and an increase in valuation difference on available-for-sale securities reflecting rising share prices.
The resulting equity ratio was 72.5%, up 4.3 percentage points from the end of the previous consolidated fiscal year.

FY2023 Consolidated Financial Overview

Operating Results

Operating Results Summary

• Net sales

  62,843 million yen

  YOY
  3.9%

• Operating profit

  6,500 million yen

  YOY
  27.3%

• Ordinary profit

  6,522 million yen

  YOY
  24.6%

• Profit attributable to owners of parent

  7,545 million yen

  YOY
  78.0%

• Earnings per share

  266.51 yen

  YOY
  77.6%

The Group’s net sales in the consolidated fiscal year under review were 62,843 million yen, up 2,381 million yen year on year (YoY). This was due mainly to growth in the pharmaceutical business driven by the growth in obstetrics and gynecological products. Cost of sales was 32,178 million yen, and cost of sales ratio was down 1.5% YoY, resulting in an increase of 2,079 million yen in gross profit YoY to 30,664 million yen. At the same time, selling, general and administrative expenses rose by 687 million yen YoY to 24,164 million yen. As a result, operating profit was up 1,392 million yen YoY to 6,500 million yen, for a ratio of operating profit to net sales of 10.3%. Ordinary profit was 6,522 million yen, after recording 414 million yen in non-operating income and 392 million yen in non-operating expenses. While the Company recorded 3,340 million yen during the period in extraordinary income associated with sale of investment securities, profit attributable to owners of parent was up 3,307 million yen YoY to 7,545 million yen. In addition, ASKA Pharmaceutical Co., Ltd. a subsidiary of the Company, has executed a capital increase agreement to issue new shares of its equity method affiliate, Ha Tay Pharmaceutical Joint Stock Company, with the aim of strengthening the partnership between the two companies.

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical business, which focuses on the three fields: internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall, despite the impact of the periodical NHI drug price revisions. A look at results by product shows that the results in the field of obstetrics and gynecology were driven by the large-scale growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 9,906 million yen (up 12.1% YoY), and the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol), which went on sale in June 2022, largely drove performance with sales of 6,125 million yen (up 66.3% YoY). Sales also grew in the internal medicine area, as sales of the thyroid hormone agent THYRADIN (levothyroxine), our main product in this field, grew to 7,862 million yen (up 1.7% YoY) and those of the poorly absorbable rifamycin antimicrobial agent RIFXIMA (rifaximin) to 5,864 million yen (up 8.7% YoY). In the urology field, sales of the LH-RH derivative microcapsule sustained-release agent LEUPRORELIN (leuprorelin) were 4,430 million yen (down 11.4% YoY).
As a result of the above factors, the segment sales were 56,016 million yen (up 4.5% YoY), and segment profit was 7,647 million yen (up 32.3% YoY).

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, were 6,664 million yen (up 0.0% YoY). However, the segment profit was 195 million yen (down 52.3% YoY) due to rising costs of raw materials and other items.

(iii) Other businesses
Sales of other businesses, which include clinical testing, medical devices, were 162 million yen (down 26.3% YoY). Segment loss was 125 million yen (vs. a loss of 6 million yen in the same period of the previous year).

Financial Position

Financial Position Summary

• Total assets

  90,745 million yen

  YOY
  4.1%

• Net assets

  61,930 million yen

  YOY
  13.6%

• Equity ratio

  68.2 ％

  YOY
  5.6point

Overview of Financial Position

(Assets)
Total assets at the end of the consolidated fiscal year under review stood at 90,745 million yen, up 3,607 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to increases in merchandise and finished goods, and investment securities, despite a decrease in distributorship.

(Liabilities)
Total liabilities at the end of the consolidated fiscal year under review stood at 28,815 million yen, down 3,789 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to decreases in retirement benefit liability and long-term borrowings (including current portion of long-term borrowings).

(Net assets)
Total assets at the end of the consolidated fiscal year under review stood at 61,930 million yen, up 7,396 million yen from the end of the consolidated fiscal previous year. This figure was due primarily to an increase in retained earnings resulting from the recording of profit attributable to owners of parent.
The resulting equity ratio was 68.2%, up 5.6 percentage points from the end of the previous consolidated fiscal year.

Cash Flow Summary

• Cash flows from operating activities 

  1,486 million yen

• Cash flows from investing activities

  1,706 million yen

• Cash flows from financing activities

  (3,943) million yen

• Cash and cash equivalents at end of period  

  16,738 million yen

Overview of Cash Flow Position 

The balance of cash and cash equivalents at the end of the current consolidated fiscal year stood at 16,738 million yen, down 766 million yen from the end of the previous consolidated fiscal year.

(Cash flows from operating activities)
Net cash provided by operating activities was 1,486 million yen (vs. a gain of 3,351 million yen in the same period of the previous year), due mainly to the recording of profit before income taxes, despite a decrease in retirement benefit liability.

(Cash flows from investing activities)
Net cash provided by investing activities was 1,706 million yen (vs. a loss of 1,126 million yen in the same period of the previous year). This was due mainly to sales of investment securities.

(Cash flows from financing activities)
Net cash used in financing activities was 3,943 million yen (vs. a loss of 1,820 million yen in the same period of the previous year). This was due mainly to repayments of long-term borrowings.

FY2022 Consolidated Financial Overview

Operating Results

Operating Results Summary

• Net sales

  60,461 million yen

  YOY
  6.8%

• Operating profit

  5,108 million yen

  YOY
  6.5%

• Ordinary profit

  5,232 million yen

  YOY
  7.2%

• Profit attributable to owners of parent

  4,238 million yen

  YOY
  (1.2%)

• Earnings per share

  150.08 yen

  YOY
  (0.75%)

The Group’s net sales in the consolidated fiscal year under review were 60,461 million yen, up 3,853 million yen year on year (YoY). This was due mainly to increased sales in the Animal Health Business, which experienced favorable sales of feed additives, in addition to growth in the Medical Pharmaceuticals Business driven by the introduction of new products and other factors. Cost of sales was 31,876 million yen, down 0.7% YoY, resulting in an increase of 2,233 million yen in gross profit to 28,584 million yen. At the same time, selling, general and administrative expenses rose by 1,920 million yen YoY to 23,476 million yen, and as a result operating profit was up 312 million yen YoY to 5,108 million yen, for a ratio of operating profit to net sales of 8.4%. Ordinary profit was 5,232 million yen, after recording 433 million yen in non-operating income and 308 million yen in non-operating expenses. While we recorded 124 million yen during the period in extraordinary income associated with sale of investment securities, due to factors including a rebound from the recording of extraordinary income associated with sale of property, plant, and equipment in the same period last year, profit for the period attributable to owners of parent was down 51 million yen to 4,238 million yen. 

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
The pharmaceutical drug business, which focuses on the three fields of internal medicine, obstetrics and gynecology, and urology, showed favorable trends overall, despite the impact of the periodical NHI drug price revisions. A look at results by product shows that results in the obstetrics and gynecology area were driven by the large-scale growth in the uterine fibroid and endometriosis agent RELUMINA (relugolix), to 8,839 million yen (up 20.5% YoY), and steady growth in the dysmenorrhea agent FREWELL (norethisterone/ ethinylestradiol), to 3,489 million yen (up 0.8% YoY), despite more than approximately 10% reduction in the NHI price revision in April 2022. In addition to these, the dysmenorrhea agent DroEthi (drospirenone/ ethinylestradiol), which went on sale in June 2022, largely drove performance with sales of 3,671 million yen. Furthermore, both the major products of internal medicine, the thyroid hormone agent THYRADIN and the poorly absorbable rifamycin antimicrobial agent RIFXIMA, for which we carried out activities intended to achieve its solid incorporation into clinical practice guidelines, showed steady growth, of 7,733 million yen (up 3.1% YoY) and 5,397 million yen (up 11.2% YoY), respectively. In the urology field, sales of the LH-RH derivative microcapsule sustained release agent LEUPRORELIN were 4,999 million yen (down 3.6% YoY). As a result of the above factors, net sales were 53,579 million yen (up 5.5% YoY) in this segment, and segment profit was 5,779 million yen (up 13.6% YoY).

(ii) Animal health business
Sales of the animal health business, which sells products such as veterinary pharmaceuticals and feed additives, grew to 6,660 million yen (up 18.3% YoY), thanks to strong sales of feed additives products. Segment profit was 409 million yen (up 8.6% YoY).

(iii) Other businesses
Sales results for other businesses, which include clinical testing, medical devices, and supplements, grew to 220 million yen (up 19.0% YoY). The hair-growth hormone measurement kits that launched in the previous fiscal year made a positive contribution to sales. However, Segment loss was 6 million yen (vs. a loss of 16 million yen in the same period of the previous year).。

Financial Position

Financial Position Summary

• Total assets 

  87,138 million yen

  Change from end of previous fiscal year
  4.6%

• Net assets

  54,533 million yen

  Change from end of previous fiscal year
  11.5%

• Equity ratio

  62.6 ％

  Change from end of previous fiscal year
  3.9point

Overview of Financial Position

(Assets)
Total assets at the end of the consolidated fiscal year under review stood at 87,138 million yen, up 3,840 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to increases in accounts such as cash and deposits, notes and accounts receivable - trade, and contract assets, raw materials and supplies, and investment securities, and others, despite decreases in distributorship and securities.

(Liabilities)
Total liabilities at the end of the consolidated fiscal year under review stood at 32,604 million yen, down 1,800 million yen from the end of the previous consolidated fiscal year. This figure was due primarily to decreases in long-term borrowings including current portion, and electronically recorded obligations - operating.

(Net assets)
Total assets at the end of the consolidated fiscal year under review stood at 54,533 million yen, up 5,641 million yen from the end of the consolidated fiscal previous year. This figure was due primarily to an increase in retained earnings resulting from the recording of profit attributable to owners of parent and an increase in valuation difference on available-for-sale securities reflecting rising share prices. The resulting equity ratio was 62.6%, up 3.9 percentage points from the end of the previous consolidated fiscal year.

Cash Flow Summary

• Cash flows from operating activities 

  3,351 million yen

• Cash flows from investing activities

  (1,126) million yen

• Cash flows from financing activities

  (1,820) million yen

• Cash and cash equivalents at end of period  

  17,505 million yen

Overview of Cash Flow Position 

The balance of cash and cash equivalents at the end of the current consolidated fiscal year stood at 17,505 million yen, up - 4 - 402 million yen from the end of the previous consolidated fiscal year.

(Cash flows from operating activities)
Net cash provided by operating activities was 3,351 million yen (vs. a gain of 2,842 million yen in the same period of the previous year), due mainly to profit before income taxes, impairment, and depreciation, which more than offset proceeds from sale of property, plant and equipment. 

(Cash flows from investing activities)
Net cash used by investing activities was 1,126 million yen (vs. a gain of 6,743 million yen in the same period of the previous year). This was due mainly to acquisition of property, plant, and equipment and of securities. 

(Cash flows from financing activities)
Net cash used in financing activities was 1,820 million yen (vs. a loss of 2,996 million yen in the same period of the previous year). This was due mainly to repayments of long-term borrowings.  

FY2021 Consolidated Financial Overview

Operating Results

Overview of Operating Results

• Net sales

  56,607 million yen

  YOY
  -

• Operating profit

  4,795 million yen

  YOY
  -

• Ordinary profit

  4,880 million yen

  YOY
  -

• Profit attributable to owners of parent

  4,290 million yen

  YOY
  -

• Earnings per share

  151.22 yen

  YOY
  57.9 %

The Group’s net sales in the consolidated fiscal year under review were 56,607 million yen. Cost of sales was 30,255 million yen and selling, general and administrative expenses were 21,556 million yen, resulting in operating profit of 4,795 million yen. Ordinary profit was 4,880 million yen, after recording 379 million yen in non-operating income and 294 million yen in non-operating expenses. As a result of factors including the recording of 9,425 million yen in gain on sale of non-current assets through the sale of land and buildings owned by the consolidated subsidiary ASKA Pharmaceutical Co., Ltd., 9,683 million yen was recorded in extraordinary income. On the other hand, 8,400 million yen was recorded in extraordinary losses due to factors including the recording of 1,151 million yen in loss on valuation of investment securities, in addition to 6,891 million yen in extraordinary losses resulting from causes such as impairment of intangible assets due to suspension of development of CDB-2914 (Ulipristal) applied for by ASKA Pharmaceutical Co., Ltd. As a result of the above factors, profit attributable to owners of parent was 4,290 million yen. 

Segment

Net sales

(Millions of yen)

(i) Pharmaceutical business
Despite the impact of developments such as the first intermediate-year revision of NHI drug prices implemented in April 2021 and progress of measures to keep down medical care costs, the pharmaceutical drugs business showed favorable performance overall, due to factors such as growth in obstetrics and gynecology products, which are a major product line. A look at results by product shows considerable growth in the obstetrics and gynecology area, to 7,334 million yen for the GnRH antagonist RELUMINA and 3,463 million yen for the dysmenorrhea agent FREWELL. In the internal medicine area, in addition to increases of 7,499 million yen for the thyroid hormone THYRADIN and 4,854 million yen for the poorly absorbable rifamycin antimicrobial agent RIFXIMA, growth in alternative demand spurred by problems in competitors’ supplies led to results of 12,394 million yen for the authorized generic CANDESARTAN and 5,183 million yen for the LHRH derivative microcapsule sustained-release formulation LEUPRORELIN.
As a result of the above factors, net sales were 50,791 million yen in this segment, and segment income was 5,088 million yen.

(ii) Others
Sales results for other businesses, which include animal health drugs, clinical testing, and medical devices, were favorable, centered on drugs for livestock and companion animals and feed additives in the animal health drugs business.
As a result of the above factors, net sales were 5,816 million yen in this segment, and segment income was 360 million yen.。

Financial Position

Overview of Financial Position Summary

• Total assets

  83,297 million yen

  Change from end of previous fiscal year
  0.8%

• Net assets

  48,892 million yen

  Change from end of previous fiscal year
  9.8%

• Equity ratio

  58.7 ％

  Change from end of previous fiscal year
  4.8point

Overview of Financial Position

(Assets)
Total assets at the end of the consolidated fiscal year under review stood at 83,297 million yen, comprising primarily 49,557 million yen in current assets, including 12,103 million yen in cash and deposits, 14,482 million yen in accounts receivable - trade, and 10,016 million yen in merchandise and finished goods, and 33,739 million yen in non-current assets, including 10,936 million yen in property, plant and equipment and 12,223 million yen in investment securities.

(Liabilities)
Total liabilities at the end of the consolidated fiscal year under review stood at 34,404 million yen, comprising primarily 16,011 million yen in current liabilities, including 3,118 million yen in notes and accounts payable - trade, 3,723 million yen in electronically recorded obligations, and 4,867 million yen in accounts payable - other, and 18,393 million yen in non-current liabilities, including 12,323 million yen in long-term borrowings and 5,730 million yen in retirement benefit liability.

(Net assets)
Total liabilities at the end of the consolidated fiscal year under review stood at 48,892 million yen, comprising primarily 45,419 million yen in shareholders’ equity, including 45,833 million yen in retained earnings, and 3,473 million yen in accumulated other comprehensive income, including 3,231 million yen in valuation difference on available-for-sale securities.
The resulting equity ratio was 58.7%.

Cash Flow Summary

• Cash flows from operating activities

  2,842 million yen

• Cash flows from investing activities

  6,743 million yen

• Cash flows from financing activities

  (2,996) million yen

• Cash and cash equivalents at end of period

  17,103 million yen

Overview of Cash Flow Position

The balance of cash and cash equivalents at the end of the current consolidated fiscal year (“funds” hereinafter) stood at 17,103 million yen.
The standing of each type of cash flow for the current fiscal year, and major contributing factors of each, are summarized below.

(Cash flows from operating activities)
Net cash provided by operating activities was 2,842 million yen, due mainly to profit before income taxes, impairment, and depreciation, which more than offset proceeds from sale of property, plant and equipment.

(Cash flows from investing activities)
Net cash provided by investing activities was 6,743 million yen, due mainly to sale of property, plant and equipment.

(Cash flows from financing activities)
Net cash used in financing activities was 2,996 million yen, due mainly to repayments of long-term borrowings.

Monthly Sales Overview

Monthly sales (YOY %) of the Group's core business, “Pharmaceutical business”.

FY2025 Net Sales (Pharmaceutical Business)

YOY %