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JPMA Member Companies Financial Summary for Fiscal 2004 and Prospects for Fiscal 2005

Non-consolidated
JPMA Member Companies : Financial Summary
for Fiscal 2004 and Prospects for Fiscal 2005

Number of companies: 31companies listed
on TSE 1st Section, including one company
with the fiscal year ending
in December 2004 and another with it ending in February 2005

1. Financial Summary for Fiscal 2004
Unit: billion yen, Figures less than one billion are rounded down to thenearest one billion


FY2003 FY2004 Change


Amount Percentage Amount Percentage Amount Percentage
change


%
%
%
Net sales
4,608  100.0  4,724  100.0  + 117  +  2.5 
Cost of sales
1,565  34.0  1,600  33.9  + 35  +  2.2 
Gross income
3,043  66.0  3,125  66.1  + 82  +  2.7 
Selling, general and
administrative expenses
2,057  44.6  2,056  43.5  - 1  -  0.0 
Operating income
986  21.4  1,068  22.6  + 82  +  8.3 
Non-operating income
and expenses
Gain 30 
Gain 49 
+ 19 
Ordinary income
1,016  22.0  1,118  23.7  + 102  +  10.0 
Extroardinary gain and loss
Gain 9 
Loss 69 
- 78 
Income taxes
407 
385 
- 23 
Net income
618  13.4  664  14.0  + 46  +  7.4 
R&D expenses
732  15.9  717  15.2  - 14  -  2.0 
Note: Data for Chugai Pharmaceutical Co., Ltd. was for the 9 months from Apr. to Dec. 2004 due to a change in the company's accounting term.

The domestic pharmaceutical market in fiscal 2004 remained in a severe condition, as the NHI drug prices were reduced in April 2004 (the industry's average: 4.2% reduction). However, domestic sales recovered assisted by special factors, including the prevalence of influenza and record-high massive pollen dispersal. In addition, overseas sales continued to grow, and overall sales increased in fiscal 2004.With silght improvement in the cost to sales ratio, operating income and ordinary income continued to rise favorably as selling, general and administrative expenses generally continue to be flat. Net income also secured growth, but the growth rate was less than that of both operating income and ordinary income, hit by expanded extraordinary losses. Summing up, the domestic pharmaceutical market in fiscal 2004 was supported by the recovery of domestic sales and increasing overseas sales under the circumstances of accelerated mergers and restructuring in the industry, in additon to the special factors mentioned above.

  1. Sales
    • Overall sales rose 2.5% compared with the previous year. (Number of companies on the upturn: 21, that of companies adverse effects from the revision of NHI drug prices and expansion of the use of generic products. (The preceding year saw a 3.8 % decline from fiscal 2002.)
    • Domestic sales showed an increase of 2.3% on a year-on-year basis, due partly to the special factors in the above, in spite of adverse effects from the revision of NHI drug prices and expansion of the use of generic products. (The preceding year saw a 3.8 % decline from fiscal 2002.)
    • Many member companies enjoyed a favorable increase in exports, which increased 25.8 billion yen (+3.8%) over the previous year to 710.5 billion yen, despite negative factors such as the yen's upswing. The export ratio in fiscal 2004 was 15.0%.
  • Gross income increased 2.7% compared with last year thanks to an improvement of 0.1% in the cost to sales ratio.
  • Selling, general and administrative expenses stayed flat due partly to a decrease in R&D expenses, which increased on a consolidated basis. R&D expenses were 717.4 billion yen, decrease by 14.4billion yen (-2.0%) from the previous term.
  • As a result, operating income grew by 8.3% on a year-on-year basis,and ordinary income increased 10.0% over the preceding year (number of companies on the upturn: 24, that of companies on the downturn: 7).However, operating results for individual companies varied depending on overseas developments and so on.
  • Net income increased by 7.4% from a year earlier, even hit by notably expanded extraordinary losses compared with the previous year due to mergers and business reconstruction efforts. (Number of companies on the upturn:21, that of companies on the downturn: 10)

    • 2. Prospects for Fiscal 2005 (For Comparison Only)
    Unit: billion yen, Figures less than one billion are rounded down to the nearest one billion
    FY2004 (Adjusted) FY2005
    (Prospected: 29 companies)    		 Change
    Amount Percentage Amount Percentage Amount Percentage
    change
    % % %
    Net Sales 4,752  100.0  4,766  100.0  + 14  +  0.3 
    Ordinary income 1,127  23.7  1,100  23.1  - 27  -  2.4 
    Net income 669  14.0  716  15.0  + 47  +  7.1 
    Note: Data in "Fiscal 2004 (Adjusted)" was calculated by adding each half amount of the operating results of Sumitomo Pharmaceuticals and Grelan Pharmaceutical and by deducting a proportional amount of the operating results of the non-pharmaceutical divisions of SSP Co. to/from the total amount of the 31 member companies. SSP was not included in the prospects for Fiscal 2005.In addition, data for Grelan Pharmaceutical was based on the financial results for the fiscal year that ended in March 2004.

    It is considered that the pharmaceutical industry in fiscal 2005 will continue to face severe market conditions such as the expanded application of the comprehensive assessment in acute phase hospitals based on the introduction of DPC and further progress in the use of generic products. Under these circumstances, overall sales are estimated to rise 0.3% from the fiscal 2004 level on an adjusted basis, since overseas sales are expected to grow steadily. On the other hand, ordinary income will edge down by 2.4%, due to an increase in R&D expenses, but net income is estimated to rise by 7.1% compared to the preceding year due to a decrease in extraordinary losses.

    Operating Results for Fiscal 2004 of Individual Member Companies (Non-consolidated)
    PDF File 32KB

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    • Office of Pharmaceutical Industry Research(OPIR)