Latest Results

FY2023 Full Year Consolidated Financial Overview

IFRS results

Revenues for the fiscal year under review were ¥1,111.4 billion (a decrease of 11.8% year on year), operating profit for the fiscal year under review was ¥439.2 billion (a decrease of 17.6% year on year), and net income for the fiscal year under review was ¥325.5 billion (a decrease of 13.1% year on year). These results include non-Core items, which are excluded from the Core results that Chugai adopts to manage recurring business activities, such as amortization of intangible assets of ¥1.6 billion, impairment loss of intangible assets of ¥5.1 billion, restructuring expenses, etc. of ¥5.5 billion (income) such as the gain on sales of non-current assets in conjunction with the closing of offices, and expenses associated with the Early Retirement Incentive Program of ¥10.3 billion. Revenue, operating profit, and net income have decreased compared to the previous fiscal year, due to the one-time impact of recognizing the lump-sum payment of ¥90.7 billion as a result of the settlement agreement between Chugai and Alexion Pharmaceuticals, Inc., in the first quarter of the previous fiscal year. For year-on-year comparisons other than the above, see Consolidated financial highlights (Core results).

Core results

Revenues for the fiscal year under review were ¥1,111.4 billion (a decrease of 4.8% year on year), due to a decrease in sales, despite an increase in other revenue.

Of revenues, sales were ¥974.5 billion (a decrease of 6.2% year on year). Domestic sales declined from the previous fiscal year primarily due to the major decrease in sales for the supply of Ronapreve® to the government, as well as the effects of the NHI drug price revisions and the market penetration of generic drugs, despite the favorable sales of the mainstay products including Enspryng®, Hemlibra®, and Tecentriq®, in addition to the strong growth of new products such as Polivy® and Vabysmo®. Overseas sales increased compared to the previous fiscal year due to the major increase in the exports of Hemlibra® and Alecensa® to Roche. Other revenue amounted to ¥136.9 billion (an increase of 6.5% year on year), due to increase in lump-sum income, etc., in addition to increase in income related to Hemlibra®. Furthermore, cost to sales ratio was 42.3%, an improvement of 3.4 percentage points year on year, reflecting a change in the product mix and other factors despite the impact of foreign exchange. As a result, gross profit amounted to ¥699.4 billion (an increase of 1.0% year on year).

Research and development expenses amounted to ¥162.8 billion (an increase of 13.3% year on year) due to investments into drug discovery/early development including the full-scale operation of Chugai Life Science Park Yokohama, and increases associated with the progress of development projects, etc. Selling, general and administration expenses amounted to ¥102.0 billion (an increase of 3.2% year on year), due to an increase in various expenses. Other operating income (expense) was income of ¥16.1 billion (¥1.4 billion of income for the same period of the previous fiscal year) due to the recognition of income from disposal of product rights and gain on sales of property, plant and equipment. As a result, core operating profit was comparable to the previous fiscal year to be ¥450.7 billion (a decrease of 0.2% year on year), and core net income has increased for seven consecutive fiscal years to ¥333.6 billion (an increase of 5.0% year on year) due to a decrease in income tax and an improvement in financial income and expenses.

Meanwhile, compared to the full year forecast announced on February 2, 2023, revenues increased by 3.9% over the full year forecast to ¥1,111.4 billion, due to the favorable performance of both domestic and overseas sales. The cost to sales ratio was 42.3%, an improvement of 1.7 percentage points over the full year forecast, reflecting a change in the product mix and other factors. Furthermore, compared to the full year forecast, research and development expenses decreased by 1.3% to ¥162.8 billion, selling, general and administration expenses increased by 2.0% to ¥102.0 billion, and other operating income (expense) increased by 7.3% to ¥16.1 billion. As a result, core operating profit surpassed the full year forecast by 8.6% to reach ¥450.7 billion and core net income by 9.0% to reach ¥333.6 billion.

Outlook for the fiscal year

(Billions of yen)

Outlook for FY 2024 % change
Revenues 1,070.0 -3.7
Sales 922.0 -5.4
Core operating profit 460.0 +2.1
Core net income 335.5 +0.6

Revenues

Revenues are expected to decrease to ¥1,070.0 billion (a decrease of 3.7% year on year).

Of revenues, domestic sales are expected to decrease to ¥454.9 billion (a decrease of 18.5% year on year), due to a decline in sales for the supply of Ronapreve® to the government (¥81.2 billion in the previous fiscal year, a decrease of 100.0% year on year), in addition to the NHI drug price revisions and the market penetration of generic drugs, despite the growth in sales volume of new products such as Phesgo® and Vabysmo® and mainstay products.

Overseas sales are expected to increase to ¥467.1 billion (an increase of 12.1% year on year), due to the significant growth in sales of Hemlibra® including the positive effects of depreciation of yen and other factors, despite a decrease in sales of Actemra®.

Other revenues are expected to reach ¥148.0 billion (an increase of 8.1% year on year). Royalty and profit-sharing income are forecasted to increase to ¥134.4 billion (an increase of 5.4% year on year), due to an increase in income related to Hemlibra® in addition to an increase in one-time income, despite a decrease in income related to Actemra®.

Core Operating Profit / Core EPS

Gross profit is expected to be ¥732.5 billion (an increase of 4.7 % year on year), with the assumption that the cost to sales ratio is 36.6%, which is a 5.7 percentage point improvement year on year, due to a change in the product mix, etc., in addition to the above outlook on revenues.

Research and development expenses are expected to increase to ¥171.0 billion (an increase of 5.0% year on year) due to an increase in research and development activities including the investments in drug discovery and early development as well as the progress of development projects, etc., and selling, general and administration expenses are expected to be comparable to the previous fiscal year at ¥102.0 billion. Other operating income (expense) is expected to be ¥0.5 billion of income in total (FY2023: ¥16.1 billion of income, mainly due to the impact of income from disposal of product rights).

As a result, Core operating profit is expected to reach a record high of ¥460.0 billion (an increase of 2.1% year on year) and Core net income is expected to increase for eighth consecutive fiscal years to ¥335.5 billion (an increase of 0.6% year on year). Core EPS of ¥204.00 (an increase of 0.6% year on year) is also expected.

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