Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd. (4967)
Summary of Financial Statements (Japanese GAAP) (Consolidated)
Financial Results for the Second Quarter (Interim Period) of
the Fiscal Year Ending December 31, 2024
August 8, 2024
Listed exchanges | : Tokyo |
Listed company name: Kobayashi Pharmaceutical Co., Ltd. | |
Code | : 4967 |
URL | :https://www.kobayashi.co.jp/english/index.html |
Representative officer : Satoshi Yamane, President & COO | |
Contact | : Yumi Nakagawa, |
Executive Officer, General Manager, CFO Unit | |
Tel | : +81-6-6222-0142 |
Expected date for submitting semi-annual securities report: August 9, 2024
Expected date for starting payment of dividends: September 5, 2024
Preparation of supplementary documents for financial results: Yes
Holding of an analyst meeting for financial results: Yes (For analysts and investors)
(Any fraction less than 1 million yen is rounded down to the nearest million yen.)
1. Consolidated Results for the Second Quarter (Interim Period) of Fiscal Year Ending December 31, 2024 (January 1, 2024 to June 30, 2024)
(1) Consolidated Operating Results (accumulation)
(% figures represent changes from same period in previous year)
Six months ended June 30, 2024 | Six months ended June 30, 2023 | |||||
Net sales | 73,136 | millions of yen | (0.7) % | 73,625 | millions of yen | 3.3 % |
Operating income | 9,471 | (9.0) | 10,406 | 5.5 | ||
Ordinary income | 10,434 | (6.6) | 11,174 | 2.5 | ||
Net income attributable to owners of | 1,436 | (81.7) | 7,864 | 2.1 | ||
the parent | ||||||
Net income per share | 19.32 | yen | 103.35 | yen | ||
(Note) Comprehensive income |
Six months ended June 30, 2024: 9,078 million yen (−37.6%)
Six months ended June 30, 2023: 14,549 million yen (26.7%)
(2) Consolidated Financial Position
Six months ended June 30, 2024 | FY ended December 31, 2023 | |||
Total assets | 262,254 | millions of yen | 267,473 | millions of yen |
Net assets | 209,734 | 204,816 | ||
Shareholders' equity ratio | 79.7 | % | 76.4 | % |
(Reference) Shareholders' equity
As of June 30, 2024: 209,137 million yen FY ended December 31, 2023: 204,370 million yen
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd. (4967)
2. Dividends
FY ended December 31, | FY ending December 31, | FY ending December 31, | |||
2023 | 2024 | 2024 (forecasts) | |||
Dividends per share | |||||
Q1 end | ⎯ | ⎯ | |||
Q2 end | 43.00 | yen | 44.00 yen | ||
Q3 end | ⎯ | ⎯ | |||
Year-end | 58.00 | 59.00 | |||
Total | 101.00 | 103.00 | |||
(Note) Revision of the latest dividend forecast: None
3. Forecasts of Consolidated Operational Results for Fiscal Year Ending December 31, 2024 (January 1, 2024 to December 31, 2024)
(% figures represent changes from previous year)
Full year | |||
Net sales | 169,000 | millions of yen | (2.6) % |
Operating income | 24,000 | (6.9) | |
Ordinary income | 25,500 | (6.7) | |
Net income | 12,100 | (40.5) | |
attributable to | |||
owners of the parent | |||
Earnings per share | 162.77 | yen |
(Note) Revision to the latest forecasts of operational results: Yes
Concerning the revision to the forecasts of consolidated operational results, please refer to "Notice Regarding the Posting of Extraordinary Loss and the Revision to Forecasts of Consolidated Operational Results for Fiscal Year Ending December 31, 2024" announced on August 8, 2024.
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd. (4967)
* Notes
- Significant changes in the scope of consolidation during the period under review: Yes
Included: One company; (Company name) KOBAYASHI Pharmaceutical Manufacturing (Thailand) Co., Ltd.
- Adoption of special accounting methods for preparing interim consolidated financial statements: None
- Changes in accounting policies, changes in accounting estimates and retrospective restatement Changes in accounting policies due to revisions of accounting standards: None
- Changes in accounting policies other than : None Changes in accounting estimates: None
Retrospective restatement: None
(4) Issued shares (common shares)
- Number of shares issued at period-end (including treasury stock):
- Number of shares of treasury stock at period-end:
- Average number of shares outstanding during period (six-month period):
As of June 30, 2024 | 78,050,000 | FY ended | 78,050,000 |
shares | December 31, 2023 | shares | |
As of June 30, 2024 | 3,711,090 | FY ended | 3,711,086 |
shares | December 31, 2023 | shares | |
As of June 30, 2024 | 74,338,912 | As of June 30, 2023 | 76,098,386 |
shares | shares | ||
- This brief report of financial statements for the second quarter (interim period) of the fiscal year ending December 31, 2024 is not subject to audit procedures by a certified public accountant or an independent auditor.
-
Notes on proper use of forecasts and other matters
The forward-looking statements in this document concerning forecasting of operational results, etc. are based on currently available information and assumptions considered reasonable by the Company. Actual operational results may be significantly different from these statements due to various factors. For matters concerning forecasts for operational results, please refer to "1. Summary of Operational Results (3) Explanation of future forecast information, such as forecast of consolidated results" on page 4 of the attachment.
(Method to obtain the supplementary explanation documents for financial results)
The Company plans to hold a results presentation for institutional investors and securities analysts on Thursday, August 8, 2024. It plans to post the supplementary documents for financial results to be distributed in the results presentation on its website on the date of the results presentation.
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
Table of Contents for Attachment | ||
1. Summary of Operational Results | 2 | |
(1) | Summary of operational results for six months ended June 30, 2024 | 2 |
(2) | Summary of financial position as of June 30, 2024 | 3 |
(3) | Explanation of future forecast information, such as forecast of consolidated results | 4 |
2. Interim Consolidated Financial Statements and Main Notes | 5 | |
(1) | Interim consolidated balance sheet | 5 |
(2) | Interim consolidated statements of income | |
and interim consolidated statements of comprehensive income | 7 | |
(3) | Interim consolidated statement of cash flows | 9 |
(4) | Notes on interim consolidated financial statements | 10 |
(Notes on assumption of going concern) | 10 | |
(Notes on a significant change in shareholders' equity) | 10 | |
(Notes on interim consolidated balance sheet) | 10 | |
(Notes on interim consolidated statement of income) | 10 | |
(Notes on segment information, etc.) | 11 | |
(Notes on revenue recognition) | 12 | |
(Notes on important subsequent events) | 12 |
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
1. Summary of Operational Results
-
Summary of operational results for six months ended June 30, 2024
Kobayashi Pharmaceutical deeply apologizes for the significant concerns and distress caused to many people regarding the occurrence of renal disorders among those who took Benikoji CholesteHelp, a functional food product it marketed. The Company is now sincerely conducting an investigation to determine the cause of the incident. At the same time, it is committed to establishing a thorough quality control system to prevent a recurrence of the incident and to devote all its energies for the recovery of trust.
During the current interim consolidated accounting period (January 1, 2024 to June 30, 2024), economic activity resumed in many countries, and the number of people moving across countries and regions showed an upward trend along with the lessening of the number of new COVID-19 cases. However, in addition to rising geopolitical risks, there were concerns about a slowdown in consumption due to soaring raw material prices and higher energy costs. Accordingly, the outlook for the business environment surrounding the Kobayashi Pharmaceutical Group continued to remain uncertain.
As a result, net sales, operating income, and ordinary income were 73,136 million yen (−0.7% year on year), 9,471 million yen (−9.0% year on year), and 10,434 million yen (−6.6% year on year), respectively, and net income attributable to owners of the parent was 1,436 million yen (−81.7% year on year).
Business results by segment were as follows:
Domestic Business
In the Domestic Business, the Company launched 15 new products in the spring of the current year. The products that contributed to growth in sales were Hipcure (an ointment for rash, eczema, etc. on the buttocks), Sawaday+ &Emotion (a functional air freshener with fragrances formulated to stabilize emotions), Shoshugen ZERO (an unscented deodorizer that is effective to remove 10 major household unpleasant smells without masking them with fragrances), and Gohonurse (Kampo, a Chinese medicine, effective at curing persistent cough by normalizing oversensitive tracheas).
In addition, as the number of foreigners visiting Japan increased, demand for its products from inbound tourists rose, contributing to sales growth.
However, sales in the food category, including nutritional supplements, were sluggish due to the impact of a voluntary recall of benikoji-related products, and sales of healthcare products declined. Furthermore, as the Company suspended advertisements of all its products in Japan after the announcement of a voluntary recall of benikoji-related products on March 22, 2024, sales of household products, which had grown steadily, also slowed down. Also in the Direct Marketing Business, sales decreased due to an increase in the cancellation of regular subscriptions.
Consequently, the Company reported net sales of 56,751 million yen (−5.7% year on year) and segment income of 9,784 million yen (+5.1% year on year).
Net sales include inter-segment sales or transfers, which totaled 2,425 million yen in the previous interim consolidated accounting period and 2,012 million yen in the current interim consolidated accounting period.
(Breakdown of sales to external customers)
Previous interim consolidated | Current interim consolidated | ||||
accounting period | accounting period | Change | |||
(January 1, 2023 to | (January 1, 2024 to | ||||
June 30, 2023) | June 30, 2024) | ||||
Amount | Amount | Amount | Change | ||
(millions of yen) | (millions of yen) | (millions of yen) | (%) | ||
Healthcare products | 30,919 | 29,823 | (1,096) | (3.5) | |
Household products | 21,233 | 21,471 | 237 | 1.1 | |
Body warmers | 1,777 | 709 | (1,068) | (60.1) | |
Direct Marketing | 3,837 | 2,735 | (1,101) | (28.7) | |
Business | |||||
Total | 57,767 | 54,739 | (3,028) | (5.2) | |
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
International Business
In the International Business, the Company markets body warmers, Netsusama Sheet (a cooling gel sheet for the forehead) and Ammeltz (an external anti-inflammatory), mostly in the United States, China, and Southeast Asia, and sought to expand sales by aggressively investing principally in advertising and sales promotion.
In the United States, the acquisition of Focus Consumer Healthcare, LLC, which markets nutritional supplements and OTC pharmaceuticals, in October 2023 contributed to growth in sales. Furthermore, growth in sales due to positive foreign currency translation effects contributed to a rise in net sales.
In China, net sales decreased since the Company suspended advertisements as it did in Japan.
In Southeast Asia, sales of Netsusama Sheet and Ammeltz, mainstay products, increased robustly. Furthermore, positive effects of the weaker yen contributed to a growth in net sales.
As a result, net sales and segment loss were 18,965 million yen (+14.4% year on year) and 491 million yen (versus a segment income of 869 million yen in the previous year), respectively.
Net sales include inter-segment sales or transfers, which totaled 1,033 million yen in the previous interim consolidated accounting period and 824 million yen in the current interim consolidated accounting period.
(Breakdown of sales to external customers)
Previous interim consolidated | Current interim consolidated | ||||
accounting period | accounting period | Change | |||
(January 1, 2023 to | (January 1, 2024 to | ||||
June 30, 2023) | June 30, 2024) | ||||
Amount | Amount | Amount | Change | ||
(millions of yen) | (millions of yen) | (millions of yen) | (%) | ||
United States | 4,663 | 6,919 | 2,255 | 48.4 | |
China | 5,512 | 4,866 | (646) | (11.7) | |
Southeast Asia | 3,810 | 4,443 | 633 | 16.6 | |
Others | 1,550 | 1,910 | 359 | 23.2 | |
Total | 15,538 | 18,140 | 2,602 | 16.7 | |
Other Businesses
Businesses in this segment include the transportation business, the manufacture and sale of plastic containers, real estate management, and advertising planning and production. The companies in this business segment operate individually on a financially independent basis, and their delivery prices of materials and services were reviewed and revised as necessary.
As a result, net sales and segment income were 3,310 million yen (−4.6% year on year) and 177 million yen (−36.6% year on year), respectively.
Net sales include inter-segment sales or transfers, which totaled 3,149 million yen in the previous interim consolidated accounting period and 3,053 million yen in the current interim consolidated accounting period.
-
Summary of financial position as of June 30, 2024
Total assets decreased by 5,219 million yen from the balance as of the end of the previous consolidated fiscal year to 262,254 million yen. This was attributable mainly to a decline of 19,472 million yen in cash and deposits, a fall of 17,868 million yen in notes and accounts receivable-trade, a growth of 8,098 million yen in merchandise and finished goods, an increase of 20,364 million yen in buildings and structures, and a rise of 1,117 million yen in investment securities.
Liabilities decreased by 10,136 million yen from the balance as of the end of the previous consolidated fiscal year to 52,520 million yen. This was attributable mainly to a decline of 7,888 million yen in accounts payable-other.
Net assets grew by 4,917 million yen from the balance as of the end of the previous consolidated fiscal year to 209,734 million yen, bringing the shareholders' equity ratio to 79.7%. This was attributable mainly to a decrease of 2,875 million yen in retained earnings, a rise of 912 million yen in valuation difference on available- for-sale securities, and a growth of 6,680 million yen in foreign currency translation adjustment.
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
(Cash Flow)
Cash flows from each of operating, investing, and financing activities for the current interim consolidated accounting period and major factors for changes are as follows:
Cash flows from operating activities
Cash flows from operating activities totaled 5,522 million yen (versus 7,246 million yen in the previous year). The major factors were income before income taxes of 2,255 million yen, depreciation of 3,149 million yen, an increase in provision for product recall-related losses of 3,603 million yen, a decrease in notes and accounts receivable-trade of 18,942 million yen, an increase in inventories of 7,492 million yen, a decrease in notes and accounts payable-trade of 2,604 million yen, a decrease in accounts payable-other of 5,921 million yen, and income taxes paid of 4,013 million yen.
Cash flows from investing activities
Cash flows from investing activities totaled −14,879 million yen (versus −8,083 million yen in the previous year). The major factors affecting this cash flow were payments into time deposits of 17,192 million yen, proceeds from withdrawal of time deposits of 24,341 million yen, and purchase of property, plant and equipment of 21,729 million yen.
Cash flows from financing activities
Cash flows from financing activities totaled −4,438 million yen (versus −4,061 million yen in the previous year). The major factor affecting this cash flow was cash dividends paid of 4,310 million yen.
Consequently, cash and cash equivalents as of June 30, 2024 totaled 47,172 million yen, a decrease of 12,518 million yen from the end of the previous consolidated fiscal year.
-
Explanation of future forecast information, such as forecast of consolidated results
Concerning the forecast of consolidated results for the fiscal year ending December 31, 2024, please refer to "Notice Regarding the Posting of Extraordinary Loss and the Revision to Forecasts of Consolidated Operational Results for Fiscal Year Ending December 31, 2024," which the Company announced on August 8, 2024.
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
2. Interim Consolidated Financial Statements and Main Notes
(1) Interim consolidated balance sheet
(millions of yen) | ||||
Previous consolidated | End of the current interim | |||
fiscal year | consolidated accounting period | |||
(December 31, 2023) | (June 30, 2024) | |||
ASSETS | ||||
Current assets | ||||
Cash and deposits | 71,536 | 52,064 | ||
Notes and accounts receivable-trade | 53,028 | 35,159 | ||
Short-term investment securities | 8,300 | 8,300 | ||
Merchandise and finished goods | 13,308 | 21,407 | ||
Work in process | 1,767 | 1,931 | ||
Raw materials and supplies | 7,006 | 7,491 | ||
Other | 3,427 | 6,027 | ||
Allowance for doubtful accounts | (44) | (32) | ||
Total current assets | 158,331 | 132,349 | ||
Non-current assets | ||||
Property, plant and equipment | ||||
Buildings and structures, net | 10,611 | 30,975 | ||
Machinery, equipment and vehicles, net | 5,152 | 5,525 | ||
Tools, furniture and fixtures, net | 1,501 | 2,497 | ||
Land | 4,900 | 5,891 | ||
Leased assets, net | 964 | 1,115 | ||
Construction in progress | 24,534 | 19,785 | ||
Total property, plant and equipment | 47,665 | 65,790 | ||
Intangible assets | ||||
Goodwill | 9,655 | 10,177 | ||
Trademark rights | 8,792 | 9,178 | ||
Software | 2,664 | 2,606 | ||
Other | 501 | 544 | ||
Total intangible assets | 21,614 | 22,506 | ||
Investments and other assets | ||||
Investment securities | 32,124 | 33,242 | ||
Long-term loans receivable | 1,132 | 1,216 | ||
Retirement benefit asset | 292 | 351 | ||
Deferred tax assets | 2,647 | 3,366 | ||
Real estate for investment, net | 2,678 | 2,664 | ||
Other | 2,163 | 2,027 | ||
Allowance for doubtful accounts | (1,176) | (1,261) | ||
Total investments and other assets | 39,862 | 41,607 | ||
Total non-current assets | 109,142 | 129,905 | ||
Total assets | 267,473 | 262,254 |
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
(millions of yen) | |
Previous consolidated | End of the current interim |
fiscal year | consolidated accounting period |
(December 31, 2023) | (June 30, 2024) |
LIABILITIES
Current liabilities
Notes and accounts payable-trade Electronically recorded obligations-operating Accounts payable-other
Lease obligations
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Provision for product recall-related losses Other
Total current liabilities
Non-current liabilities
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income Valuation difference on available-for-sale securities
Foreign currency translation adjustment Re-measurements of retirement benefit plans
8,745 | 8,754 | |||
8,560 | 6,310 | |||
25,037 | 17,148 | |||
379 | 423 | |||
4,059 | 1,999 | |||
788 | 195 | |||
2,705 | 2,692 | |||
- | 3,603 | |||
5,836 | 4,800 | |||
56,111 | 45,930 | |||
608 | 721 | |||
2,594 | 2,525 | |||
939 | 967 | |||
2,403 | 2,374 | |||
6,545 | 6,590 | |||
62,656 | 52,520 | |||
3,450 | 3,450 | |||
522 | 522 | |||
205,681 | 202,806 | |||
(24,766) | (24,766) | |||
184,887 | 182,012 | |||
12,819 | 13,732 | |||
6,403 | 13,083 | |||
259 | 308 |
Total accumulated other comprehensive income | 19,483 | 27,125 | |
Share acquisition rights | 446 | 596 | |
Total net assets | 204,816 | 209,734 | |
Total liabilities and net assets | 267,473 | 262,254 |
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Brief Report of Financial Statements for the Second Quarter (Interim Period) of the Fiscal Year Ending December 31, 2024
Kobayashi Pharmaceutical Co., Ltd.
-
Interim consolidated statements of income and interim consolidated statements of comprehensive income
(Interim consolidated statements of income) (Interim consolidated accounting period)
(millions of yen) | ||||
Previous interim consolidated | Current interim consolidated | |||
accounting period | accounting period | |||
(January 1, 2023 to | (January 1, 2024 to | |||
June 30, 2023) | June 30, 2024) | |||
Net sales | 73,625 | 73,136 | ||
Cost of sales | 31,134 | 32,379 | ||
Gross profit | 42,490 | 40,757 | ||
Selling, general and administrative expenses | 32,083 | 31,285 | ||
Operating income | 10,406 | 9,471 | ||
Non-operating income | ||||
Interest income | 116 | 120 | ||
Dividend income | 251 | 300 | ||
Real estate rent | 147 | 147 | ||
Foreign exchange gains | 158 | 360 | ||
Other | 271 | 234 | ||
Total non-operating income | 945 | 1,163 | ||
Non-operating expenses | ||||
Interest expenses | 11 | 17 | ||
Rent cost of real estate | 51 | 51 | ||
Provision of allowance for doubtful accounts | 80 | 84 | ||
Other | 34 | 45 | ||
Total non-operating expenses | 177 | 200 | ||
Ordinary income | 11,174 | 10,434 | ||
Extraordinary income | ||||
Gain on sales of non-current assets | 2 | 3 | ||
Gain on sale of investment securities | - | 0 | ||
Other | - | 0 | ||
Total extraordinary income | 2 | 4 | ||
Extraordinary loss | ||||
Loss on sales and retirement of non-current assets | 29 | 32 | ||
Losses related to defective products | - | 7,726 | ||
Other | 82 | 424 | ||
Total extraordinary loss | 111 | 8,183 | ||
Income before income taxes | 11,065 | 2,255 | ||
Income taxes-current | 3,065 | 1,841 | ||
Income taxes-deferred | 133 | (1,022) | ||
Total income taxes | 3,198 | 818 | ||
Net income | 7,866 | 1,436 | ||
Net income attributable to non-controlling interests | 1 | - | ||
Net income attributable to owners of the parent | 7,864 | 1,436 |
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