■Performance Trends

Taiko Pharmaceutical ＜4574＞ is developing a pharmaceutical business centered on “Seiromaru” and “Seirogan Sugar-Coated A,” and an infection control business centered on the virus removal/sterilization/deodorizing product “Creverin” series.

In the second quarter of the fiscal year ending 2024/12, sales were 2,860 million yen (up 14.9% from the same period last year), operating profit was 482 million yen (loss of 396 million yen in the same period last year), ordinary profit was 528 million yen (loss of 510 million yen), and interim net profit attributable to parent company shareholders was 764 million yen (loss of 514 million yen), achieving surplus for the first time in four fiscal years as the second quarter.

As for sales, the pharmaceutical business led the increase in sales, with the pharmaceutical business being 2,654 million yen (up 25.5% from the same period last year) and the infection control business being 203 million yen (down 45.1% from the same period). Domestic sales in the pharmaceutical business were steady at 1,835 million yen (up 7.8% from the same period). Shipment restrictions on “Seirogan Sugar-Coated A” and “Seiromaru Quick C,” which had been restricted due to steady demand and insufficient supply, were lifted due to strengthened supply systems, contributing to an increase in sales. Also, as the domestic antidiarrheal market recovers to a level higher than before the spread of the novel coronavirus infection (hereinafter, COVID-19), the company's market share is also rising to 46.9% (45.8% in the same period last year) from 2024/4/4 to 6. Overseas sales in the pharmaceutical business increased drastically to 819 million yen (up 98.5% from the same period). The reason for the increase in sales was the partial resumption of supply to Hong Kong, which had been delayed due to production schedule adjustments. Sales in the infection control business were slightly higher than the same period last year for domestic general use, but commercial use continued to be sluggish, and sales declined.

Gross profit increased drastically (59.8% increase compared to the same period last year) due to an increase in sales in the pharmaceutical business, improvements in inventory valuation losses, etc., and cost improvements due to improved operating levels and a decrease in depreciation and amortization expenses. Although there is an effect of backtracking marketing costs, SG&A expenses declined drastically due to a decrease in transportation costs (inventory storage fees) and other expenses due to the promotion of structural reforms (down 17.3% from the same period). As a result, operating profit increased by 878 million yen to 482 million yen. In terms of segment profit, the pharmaceutical business improved with 1,086 million yen (up 110.9% from the same period), and the infection control business lost 195 million yen (loss of 407 million yen in the same period last year). Note, the interim net profit attributable to parent company shareholders includes the recording of 200 million yen in compensation received in connection with purchase transactions in the pharmaceutical business. Overall, the management policy for the 2024/12 fiscal year to “build a profit base centered on the pharmaceutical business and improve the profit structure by slimming down management” is being steadily implemented.

As for the financial base, it can be evaluated as highly secure. The current ratio of 360.9% at the end of 2024/6 exceeded 200%, which is a guideline for safety, and the equity ratio of 60.3% is also at a high level. Interest-bearing debt is 2,602 million yen, which is suppressed even when compared to cash and deposits of 5,152 million yen. Additional procurement capacity has also been secured through commitment line agreements with financial institutions. Along with the exercise of stock acquisition rights issued in 2023/3 (exercise completed in 2024/1), interest-bearing debt was reduced by 1,157 million yen from the end of the 2022/12 fiscal year to the end of 2024/6, and the strengthening of the financial base progressed further.

(Written by FISCO Visiting Analyst Hideo Kakuta)