Towa Pharmaceutical (4553) Q2 2025 earnings summary

Executive summary

• Consolidated net sales rose 14.9% year-over-year to JPY 123.4 billion, with operating profit up 50.1% to JPY 10.5 billion, driven by strong domestic demand and a weaker yen boosting overseas results.

• Ordinary profit increased 1.0% to JPY 10.3 billion, while profit attributable to owners declined 5.7% to JPY 6.56 billion.

• Domestic segment saw robust sales and profit growth, while overseas segment sales increased but posted a segment loss due to higher R&D and nitrosamine response costs.

• The company revised its full-year forecast upward, reflecting strong first-half results and lower-than-expected R&D expenses.

• Comprehensive income dropped 59.4% year-over-year to JPY 4.65 billion.

Financial highlights

• Net sales: JPY 123.4 billion (+14.9% YoY); operating profit: JPY 10.5 billion (+50.1% YoY); profit attributable to owners: JPY 6.56 billion (-5.7% YoY).

• Gross profit improved 17.5% YoY to JPY 44.9 billion; cost of sales increased 13.5% YoY; SGA expenses up 10.1% YoY.

• Earnings per share were JPY 133.17, down from JPY 141.26 a year earlier.

• Comprehensive income dropped 59.4% YoY to JPY 4.65 billion.

• Ordinary profit was flat (+1.0% YoY), while profit before tax declined slightly (-0.9% YoY).

Outlook and guidance

• Revised full-year net sales forecast to JPY 262.1 billion (+15.0% YoY), operating profit to JPY 23.3 billion (+32.0% YoY), and profit attributable to owners to JPY 15.0 billion.

• No change in the second half plan; upward revision reflects strong first-half performance and lower R&D costs.

• Annual dividend forecast is JPY 60.00 per share.

• Overseas segment sales forecast raised due to weaker yen.