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Towa Profits Take 87% Nosedive In Face Of Increased Costs

Firm Has Further Lowered Its Annual Estimates Following November Revision

 
• By Chloe Kent

Japanese generics firm Towa has seen its profits slashed as increased expenses stemming from its acquisition of Sunsho Pharmaceutical decimated its bottom line in Q3.

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Analysts had previously expressed concerns around the Sunsho acquisition • Source: Shutterstock

The consolidation of Sunsho Pharmaceutical has proved to be something of a double-edged sword for Towa Pharmaceutical Co Ltd, as the acquisition both boosted sales and sent costs soaring during Q3. Huge rises in the cost of doing business have left Towa’s profits tumbling by 86.8% year on year, fueled by Sunsho-related selling, general and administrative expenses, as well as substantial rises in the price of raw materials and utilities.

The company ultimately brought in profits attributable to owners of the parent of ¥1.98bn ($14.8m), a sharp drop from the ¥15bn it had made at the end of December 2021. This was despite an 11.8% YoY increase in net sales, up to ¥140bn, as cost of sales rose 24.4% to ¥89

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