Otsuka (4578) Q2 2024 earnings summary

Executive summary

• Revenue rose 17.0% year-on-year to ¥1,109.8 billion, with business profit up 37.8% to ¥213.6 billion, driven by strong pharmaceutical and nutraceutical sales.

• Net profit increased 5.1% to ¥107.8 billion despite a ¥103,293 million impairment loss on AVP-786, supported by finance income.

• First-half results exceeded revised plans, with both segments outperforming expectations and business profit at 115.5% of the May 2024 forecast.

• Comprehensive income for the period was ¥264,541 million, up 13.8% year-on-year.

• Operating profit declined 3.4% to ¥126,279 million due to the impairment loss.

Financial highlights

• Operating cash flow before R&D investment increased by approximately ¥20 billion year-on-year.

• Pharmaceutical business revenue grew 17.9% year-on-year to ¥766.7 billion, achieving 108% of the initial plan.

• Nutraceutical business revenue increased over 20% year-on-year to ¥271.8 billion, with a 107% achievement rate versus plan.

• Gross profit rose to ¥792,718 million from ¥659,674 million year-on-year.

• Basic earnings per share increased to ¥198.61 from ¥189.06 year-on-year.

Outlook and guidance

• Full-year revenue forecast revised up by ¥175 billion to ¥2,315 billion; business profit forecast raised by ¥60 billion to ¥390 billion.

• Net profit forecast for FY2024 set at ¥240 billion, nearly double 2023's result, with basic EPS of ¥443.01.

• Operating profit forecast lowered to ¥302 billion due to impairment loss.

• Pharmaceutical business revenue forecast revised up by ¥30 billion to ¥481.5 billion.

• Nutraceutical business expected to grow 14% year-on-year to ¥553 billion.