Kobayashi Pharmaceutical (4967) Q4 2025 earnings summary

Executive summary

• Net sales for FY2025 were 165.7 billion yen, up 0.1% YoY, but operating income dropped 40.0% to 14.9 billion yen and net income fell 63.7% due to impairment and recall losses, mainly from the red yeast rice incident.

• Extraordinary impairment losses of 14.6–14.8 billion yen were recorded for the Sendai and Thai plants, reflecting delays and reduced profitability.

• Product recall-related losses of 3.69 billion yen were recognized, mainly for red yeast rice products.

• Compensation for health damage is ongoing, with 260 out of 510 eligible individuals paid as of January 2026.

• Most measures to prevent recurrence after the red yeast rice incident have been implemented, focusing on quality, safety, and governance reforms.

Financial highlights

• Net sales: 165.7 billion yen (+0.1% YoY); operating income: 14.9 billion yen (−40.0% YoY); net income: 3.6 billion yen (−63.7% YoY).

• EBITDA: 23.6 billion yen (−28.0% YoY); gross profit margin: 51.1%.

• Domestic business net sales: 118.0–122.9 billion yen (−0.8% to −1.5% YoY); international business: 46.9–48.4 billion yen (+3.4% to +4.0% YoY).

• Dividend maintained at 104 yen per share for FY2025; FY2026 forecast is 106 yen.

• Comprehensive income dropped 68.0% to 5.09 billion yen.

Outlook and guidance

• FY2026 forecast: net sales to rise to 173.0 billion yen (+4.4% YoY), operating income to fall to 12.5 billion yen (−16.2% YoY), net income to increase to 10.0 billion yen (+173.5% YoY).

• Domestic and international sales expected to grow, but profit to decline due to higher advertising, depreciation, and capital expenditures.

• No contribution from new M&A deals expected.

• Launch of a new three-year medium-term management plan starting FY2026.

• Dividend forecast for FY2026 is 106 yen per share.