Overview of financial results for the first half of the year under review (April 1, 2018 to September 30, 2018)
In the first half of the year ending March 31, 2019, Takara Shuzo and Takara Shuzo International Group posted strong results, while Takara Bio Group also saw an increase in revenue from consideration received as part of a joint development and exclusive sales agreement for its gene therapy products. As a result, we posted record high consolidated net sales of ¥133,987 million, up 4.0% over the previous first half.
On the profit front, operating income totaled ¥8,159 million, up 33.1% over the same period last year and ordinary income came in at ¥8,243 million, up 32.9%, both representing record highs, despite an increase in SG&A expenses, primarily transport costs and administrative expenses. Quarterly net income attributable to owners of the parent increased by 32.8% year on year, to ¥4,578 million, despite an extraordinary loss booked on losses from damaged products caused by Typhoon 21 (Typhoon Jebi).
As for our earnings forecast for this fiscal year, we revised net sales downward by ¥2,000 million compared to the initial plan, but we have left the forecast for operating income and ordinary income unchanged and we expect to book a gain on the sale of shares of affiliated companies as extraordinary income; therefore, we revised net income attributable to owners of the parent upward by ¥400 million.
Progress under the Takara Group Medium-Term Management Plan FY2020
In April 2017, we kicked off efforts under the Takara Group Medium-Term Management Plan FY2020 that covers the three years from April 2017 through the fiscal year ending March 2020. This plan is our final step toward realizing the Takara Group Vision 2020, our 10-year long-term management vision established in April 2011.
Takara Shuzo is aiming to further boost sales after releasing a new dry sake called Mio (BRUT Dry) in September this year as part of its strategic lineup of sparking sake under the Mio brand. In the strongly-performing light-alcohol refreshers category, the company has decided to expand production facilities of canned chu-hi products given future growth expectations.
Takara Shuzo International Group has seen strong business results from its overseas wholesaling business for Japanese foods, underpinned by the growing popularity of Japanese food around the world. The company has focused on developing business infrastructure aimed at further growth, including kicking off an expansion plan of its logistics facilities in North America.
Takara Bio Group has made progress on the construction of a new facility for further expanding its CDMO business. At the same time, the company is making steady forward progress with clinical development projects in the Gene Therapy Business, including plans to apply for approval for this fiscal year in Japan of C-REV (previously: HF10) targeting melanoma.
In addition, to further concentrate our management resources on the three business segments of Domestic, Overseas and Biomedical, we have reached an agreement to sell our subsidiary Takara Healthcare Inc., which sells functional foods mainly through mail order, and the functional foods business of Takara Bio Inc. to Shionogi Healthcare & Co., Ltd. on January 1, 2019 (planned).
Working to enhance corporate value
The Takara Group will continue working closely together to achieve the Takara Group Medium-Term Management Plan FY2020, realize the Takara Group Vision 2020, and aim at even greater growth in the future.v
I ask our valued shareholders for their continued support and encouragement.
Representative Director and President
Takara Holdings Inc.