Sawai Group Holdings Co (4887) Q2 2027 earnings summary

Executive summary

• H1 FY27 revenue rose 3.2% YoY to ¥102,019m; operating profit increased 12.4% to ¥9,595m, partly reflecting the absence of prior-year litigation settlement costs.

• Core operating profit fell 13.0% to ¥11,973m and owner profit fell 15.7% to ¥4,926m, as inventory losses, higher costs and weaker sales of older products pressured results.

• Production volume rose 10.7% YoY to 9.1bn tablets; sales volume increased 1.8% to 8.6bn tablets.

Financial highlights

• H1 gross profit was ¥29,608m versus ¥29,761m; SG&A rose to ¥13,857m from ¥11,975m and R&D expense to ¥6,040m from ¥5,244m.

• Profit before tax rose 8.4% to ¥8,630m; profit from continuing operations was ¥5,923m versus ¥6,007m a year earlier.

• Total comprehensive income declined to ¥4,845m from ¥6,100m; basic EPS was ¥42.62 versus ¥50.63.

• H1 operating profit was ¥3,505m below forecast; revenue exceeded forecast by ¥1,019m, while gross profit was ¥2,492m below forecast.

Outlook and guidance

• FY27 forecast: revenue ¥212,700m, operating profit ¥22,900m, profit before tax ¥20,900m and owner profit ¥13,700m; guidance was unchanged from the latest announcement.

• FY27 core operating profit forecast is ¥26,500m; gross profit ¥61,500m, SG&A ¥27,600m and R&D ¥10,900m, including H1 impairment losses.

• FY27 basic EPS forecast is ¥118.49; dividend forecast is ¥56/share, comprising ¥28/share at H1 and ¥28/share at year-end.

• FY27 new-product sales are expected to reach ¥8.0bn, versus the prior forecast of ¥6.3bn; annual production and sales volume plans are 18.0bn and 17.6bn tablets.