In FY2023 (the 22nd term), our group promoted efforts to develop fundamental biologics development technologies through the Reagents / Instrument business and CDMO business, under the 6-year Long-Term Management Vision 2025, which ends in FY2025, and the 3-year Medium-Term Management Plan 2025, and to aim to become a global platform provider of infrastructure for the life sciences industry.
In the consolidated cumulative 2Q under review, net sales decreased to 19.116 billion yen (down 41.3% year on year) due to a decrease in sales of covid test-related reagents resulting from a change in the legal positioning of new-type coronavirus infectious diseases. Cost of sales decreased 45.3% year on year to 5.772 billion yen mainly due to a decrease in sales. As a result, gross profit decreased 39.4% year on year to 13.343 billion yen. Selling, general and administrative (SG&A) expenses increased 7.0% to 11.933 billion yen due to an increase in personnel expenses and R&D expenses. Operating income decreased to 1.41 billion yen (down 87.0%).
As a result of the decrease in operating income, ordinary income decreased by 85.4% year-on-year to 1.598 billion yen, income before income taxes and minority interests decreased by 86.6% to 1.588 billion yen, and profit attributable to owners of parent decreased by 87.3% to 1.084 billion yen.
With regard to full-year results, we have revised our previous forecast announced on May. 11, 2023, reflecting a slump in the global life science research and development market, which was affected by prolonged inflation and the economic recession, and a tough business environment, including intense price competition for products and services.
Net sales are expected to be lower than the previous forecast, mainly due to the overseas reagent/instrument business and the contracted genetic analysis business. Due to the impact of the decline in sales, each profit item is also expected to be lower than the previous forecast. As a result of these factors, we forecast consolidated net sales of 45.5 billion yen (down 41.8% year on year), operating income of 3 billion yen (down 85.4%), ordinary income of 3.2 billion yen (down 84.5%), and net income attributable to owners of parent of 2 billion yen (down 87.5%).
Although we are not satisfied with our forecast, we will work to sustainably increase our corporate value by steadily implementing the various plans set forth in the Medium-Term Management Plan 2025 through aggressive business development.
In order to proactively carry out research and development activities, we regard the return of profits to shareholders as an important management issue, while striving to enhance internal reserves. Our basic policy is to return profits to shareholders by comprehensively taking into account our operating results and financial position.
Although we expect a harsh business performance in FY2023, the year-end dividend is expected to remain unchanged from the initial plan, at 17 yen per share. We will reduce the dividend from the previous fiscal year, but we would like to ask for the continued understanding and support of our shareholders.
November 2023
Koichi Nakao
President
