Kyowa Hakko Kirin Co., Ltd. (Kyowa Hakko Kirin)(TOKYO:4151) today announced revised forecasts for the interim and full year period of the fiscal year ending March 31, 2009. While the consolidated full year net sales forecast is unchanged, operating income for the full year is expected to be 12.3% lower than previously forecast, mainly due to lower than expected sales of certain pharmaceutical products and the worldwide slowdown in economic growth. Full year net income is expected to be 39.3% lower than previously forecast, largely as a result of one–time tax expenses related to the planned disposal of a subsidiary and expenses related to the integration with Kirin Pharma.
Details of the revised forecasts and previous forecasts announced on April 28, 2008 are as follows (please note that results for the interim and full year periods of fiscal 2007 do not include the results of Kirin Pharma):
| Revised forecasts: Interim period (April 1, 2008 to September 30, 2008) | |||||||||||
| Millions of yen | |||||||||||
| Consolidated | Net sales
| Operating income
| Recurring income
| Net income
| Net income per share (JPY) | ||||||
| Previous forecasts | 245,000 | 31,000 | 31,000 | 16,000 | JPY 27.84 | ||||||
| Revised forecasts | 247,700 | 29,100 | 30,300 | 8,200 | JPY 14.43 | ||||||
| Change in forecasts | 2,700 | (1,900) | (700)) | (7,800) | –– | ||||||
| Percentage change | 1.1% | (6.1)% | (2.3)% | (48.8)% | –– | ||||||
| Reference: Results for interim period ended September 2007 | 192,639 | 18,246 | 18,080 | 11,047 | JPY 27,77 | ||||||
| Revised forecasts: Full year (April 1, 2008 to March 31, 2009) | |||||||||||
| Millions of yen | |||||||||||
|
Consolidated |
Net sales
| Operating income |
Recurring income
|
Net income
|
Net income per share (JPY) | ||||||
| Previous forecasts | 490,000 | 57,000 | 56,000 | 28,000 | JPY 48.72 | ||||||
| Revised forecasts | 490,000 | 50,000 | 50,000 | 17,000 | JPY 29.60 | ||||||
| Change in forecasts | – | (7,000) | (6,000) | (11,000) | –– | ||||||
| Percentage change | – | (12.3)% | (10.7)% | (39.3)% | –– | ||||||
| Reference: Results for fiscal year ended March 2008 | 392,119 | 39,390 | 37,996 | 23,477 | JPY 59.03 | ||||||
Reasons for revised forecasts
Interim period
As announced separately today, Kyowa Hakko Kirin has signed an agreement to sell the shares held in its consolidated subsidiary Kyowa Hakko Food Specialties Co., Ltd. As a result, in accordance with tax effect accounting rules we are required to recognize the tax effect of the one–time difference (the difference between the amount of the investment in the consolidated balance sheets and the book value of the investment in the non–consolidated balance sheets) in respect of this investment in our consolidated financial statements. As this is expected to result in a corporate tax adjustment (and deferred tax liability) of approximately JPY 5.6 billion in the interim financial statements, our net income forecast for the interim period has been revised downward.
Regarding segmental performance, the Bio–Chemicals and Chemicals segments are performing ahead of expectations, and the Food segment is progressing broadly in line with expectations. However, in the Pharmaceuticals segment we expect performance to be below our initial expectations due to lower than expected sales of anemia treatments NESP and ESPO, and REGPARA, a treatment for secondary hyperthyroidism during dialysis therapy. In addition, in–licensing and other expenses of approximately JPY 3 billion have been incurred.
As a result, for the group overall, net sales for the interim period are expected to be above forecast, while operating income and recurring income are expected to be slightly below initial forecasts.
Full year
Regarding full year forecasts, in the Pharmaceuticals segment we forecast a similar trend to that seen for the interim period. Also, the environment for the Chemicals and other segments is expected to worsen due to the worldwide slowdown in economic growth and other factors. As a result, we expect profit for each business segment to be below initial expectations and so we have revised down our forecasts for operating income and recurring income.
As regards net income, the planned transfer of shares of Kyowa Hakko Food Specialties Co., Ltd. in March 2009 is expected to result in an extraordinary profit on disposal of approximately JPY 4.5 billion. However, after the application of tax effect accounting rules, net income for the fiscal year is expected to be negatively affected by approximately JPY 3 billion. In addition, we are forecasting increased extraordinary losses from factors such as the integration of sales outlets with those of Kirin Pharma and from the integration of facilities as we reorganize R&D. As a result we have reduced our forecast net income for the full year.
*The above forecasts are based on information available and assumptions made at the time of release of this document about a number of uncertain factors that can affect results in the future. It is possible that actual results are materially different for a wide variety of reasons.
For further information please access: http://www.kyowa–kirin.co.jp/english/index.html
This document is an English translation of the Japanese–language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. It contains forward–looking statements based on a number of assumptions and beliefs made by management in light of information currently available. Actual financial results may differ materially depending on a number of factors, including fluctuations in exchange rates, changing economic conditions, legislative and regulatory developments, delays in new product launches, and pricing and product initiatives of competitors.
