July 26, 2006 

Kyowa Hakko Q1 operating income

Kyowa Hakko announced July 25, higher operating income by 3.6 percent for its first quarter results this year in the Apr 1 to Jun 30 three-month period.

Operating income was up 3.6 percent or higher at JPY0.2 billion to JPY8.1 billion (US$69.190 million), boosted by lower SG&A (selling, general and administrative) expenses in its pharmaceuticals business, said the Japanese pharma, bio-chemical, chemical and food multinational in its news release.

But despite good performance in its core pharmaceutical products and higher sales in its bio-chemicals and chemicals businesses, net sales fell overall from the previous quarter in the last fiscal year. Consolidated net sales were JPY85.6 billion, a dip of JPY2.7 billion or 3.1 percent from the previous quarter in the last fiscal year.

Net income from the period was slashed by 51.8 percent or JPY2.2 billion, a result of extraordinary losses from the sale of equity in related companies. Net income ended the quarter at JPY2.0 billion.

In bio-chemicals, sales of amino acids, nucleic acids, and related compounds for pharmaceuticals and industrial-use surged. Kyowa Hakko is one of Japan's biggest producers of feed lysine.

Group profits took an overall beating from increased raw materials and fuel prices, particularly in the chemicals business. But lower SG&A expenses in its pharmaceuticals R&D expenses and personnel costs rallied first quarter operating income JPY0.2 billion or 3.6 percent higher, to JPY8.1 billion.

President of Kyowa Hakko, Yuzuru Matsuda, confirmed a strong first quarter in its core businesses as "broadly in-line with plan". Full year forecasts for sales, operating income, recurring income and net income were maintained at the levels forecast in April 2006, said the press release.