Sawai Group Holdings Co (4887) Q2 2026 earnings summary

Executive summary

• Revenue grew 12.5% year-over-year to JPY 98,843 million, driven by higher unit prices, increased sales volume, and the lifting of shipment limitations, especially for products under the selective treatment system.

• Operating profit declined 27.4% year-over-year to JPY 8,534 million due to a significant patent infringement settlement cost of 4 billion yen.

• Core operating profit rose 9.5% year-over-year, supported by higher revenue despite increased fixed expenses and NHI drug price revisions.

• Interim profit attributable to owners dropped 69.1% year-over-year, reflecting the absence of prior year gains from the U.S. business transfer and quality control issues.

• Strategic investments included expanding production capacity, acquiring rights to Warfarin, and launching new digital health products.

Financial highlights

• Revenue: JPY 98,843 million (+12.5% YoY); Core operating profit: JPY 13,764 million (+9.5% YoY); Operating profit: JPY 8,534 million (−27.4% YoY); Profit before tax: JPY 7,962 million (−30.2% YoY); EPS: JPY 50.63 (−65.4% YoY).

• Gross profit increased year-over-year to JPY 29,761 million as revenue growth offset lower NHI drug prices and higher fixed costs.

• EBITDA (adjusted): JPY 20,373 million (+6.7% YoY).

• Cash and cash equivalents at period end: JPY 33,367 million, down from JPY 49,660 million a year earlier.

• Free cash flow for 1H FY2025 was negative at JPY −15,598 million.

Outlook and guidance

• Full-year revenue forecast revised up to JPY 202,500 million (+1.1% vs. initial), but operating profit and net profit forecasts revised down by 18.4% and 19.5%, respectively.

• FY2026 forecast: Revenue JPY 202,500 million (+7.1% YoY), Operating profit JPY 20,900 million (+416.1% YoY), Profit attributable to owners of parent JPY 14,000 million (+17.0% YoY), Basic EPS JPY 121.25.

• New product launches in December 2025 expected to contribute JPY 2.3 billion in sales for FY2025.

• Aiming to achieve 2H revenue and operating profit in line with initial forecasts, despite full-year profit targets being slightly out of reach.

• No revisions to previously announced forecasts for FY2026.