Towa Pharmaceutical (4553) Q1 2025 earnings summary

Executive summary

• Consolidated net sales rose 14.7% year-over-year to JPY 62.6 billion, driven by strong domestic demand and a weaker yen boosting overseas results.

• Operating profit increased 38.5% year-over-year to JPY 5.7 billion, aided by a JPY 2.2 billion gain on valuation of derivatives.

• Profit attributable to owners of parent was JPY 5.5 billion, up 15.7% year-over-year.

• Both sales and profit increased in the domestic segment due to higher sales volume, while overseas net sales grew 19% year-over-year, though segment loss widened due to higher R&D and other expenses.

• The company revised its full-year operating profit forecast upward, reflecting lower-than-expected outsourced manufacturing costs and a reduced cost of sales ratio.

Financial highlights

• Net sales: JPY 62.6 billion (+14.7% YoY); Operating profit: JPY 5.7 billion (+38.5% YoY); Ordinary profit: JPY 8.6 billion (+23.5% YoY); Net income attributable to owners: JPY 5.5 billion (+15.7% YoY).

• Gross profit improved 16.7% YoY to JPY 23.3 billion, with gross margin expansion.

• Earnings per share increased to JPY 111.64 from JPY 96.51 YoY.

• Total assets reached JPY 451.2 billion, up JPY 20.6 billion from March 31, 2024.

• Cash and cash equivalents at quarter-end were JPY 35.0 billion, up JPY 5.4 billion from the previous fiscal year-end.

Outlook and guidance

• Full-year net sales forecast revised to JPY 261.5 billion (+14.7% YoY), with operating profit projected at JPY 19.6 billion (+11.1% YoY).

• Profit attributable to owners of parent for the year is forecast at JPY 12.6 billion (-22.1% YoY), with EPS of JPY 255.99.

• First-half operating profit forecast raised to JPY 6.8 billion (+30.8% vs. previous plan).

• Domestic segment profit forecast revised up to JPY 23.9 billion for the year.

• Dividend forecast maintained at JPY 60 per share for the full year.