Otsuka (4578) Q2 2025 earnings summary

Executive summary

• Revenue for H1 FY2025 rose 6.5% year-over-year to ¥1,180.8 billion, with business profit up 12% to ¥239.2 billion, driven by strong pharmaceutical and nutraceutical sales, especially REXULTI and ABILIFY MAINTENA.

• Operating profit surged 91.7% to ¥242.1 billion, and net profit increased 61.0% to ¥173.5 billion, reflecting operational improvements and strategic initiatives.

• All profit items grew year-over-year, exceeding the first-half plan despite yen appreciation and higher SG&A and R&D expenses.

• Major growth drivers included REXULTI/RXULTI, ABILIFY ASIMTUFII, and JINARC/JYNARQUE.

• Additional shareholder returns announced, including a dividend increase to ¥140 per share and share buybacks.

Financial highlights

• Pharmaceutical revenue grew 8.7% to ¥833.8 billion, led by REXULTI (+26.5%) and ABILIFY MAINTENA/ASIMTUFII (+114.2%), while nutraceutical revenue rose 1.6% to ¥276.1 billion.

• Business profit margin improved to 20.3% in H1 FY2025 from 19.3% a year earlier.

• R&D expenses increased 13.2% year-over-year, reflecting investment in new indications and products.

• Gross profit increased by ¥62.6 billion, offsetting higher SG&A and R&D expenses.

• Foreign exchange had a negative impact of ¥23.8 billion on revenue and ¥5.9 billion on business profit in H1.

Outlook and guidance

• Full-year FY2025 revenue forecast at ¥2,380.0 billion (+2.2% year-over-year), business profit at ¥400.0 billion, and operating profit at ¥450.0 billion (+39.1%), reflecting gains from MicroPort share sales.

• Net profit forecast at ¥330.0–351.0 billion, with EPS guidance raised to ¥622.52.

• ROE and ROIC targeted at over 12% for FY2025, supported by capital efficiency initiatives.

• Annual dividend to be increased to ¥140 per share.

• Guidance reflects new consolidation of Otsuka ICU Medical and lower SG&A and R&D expenses due to FX.