Astena Holdings Co.,Ltd. Q1 FY2026 earnings call

• Overall Quarterly Performance

  • Total group revenue and profit grew year-over-year in 1Q, driven by contributions from the Chemicals and HBC & Food businesses, with overall progress roughly on track against the full-year plan.
  • Revenue increased due to the contribution of newly consolidated subsidiaries, with the 1Q revenue progress rate reaching 24% against the full-year forecast; operating profit progress rate reached 34%, ordinary profit 33%, and net profit attributable to parent shareholders 25%.
  • Total group operating profit increased 120 million yen year-over-year, as strong growth in Chemicals and HBC & Food offset profit declines in other business segments.

• Segment Operational Highlights

  • Fine Chemical Business: The Pharmaceutical Development Ecosystem segment performed well, with steady revenue and profit growth from new large CMC projects and medium-molecule API process development projects using Molecular Hiving technology. The Pharmaceutical Raw Material Platform and Pharmaceutical CDMO segments both performed poorly due to import restrictions in China, supply delays and customer-driven delivery reductions.
  • HBC & Food Business: The food raw material and cosmetic raw material segments both saw steady revenue and profit growth from new customer acquisition. The cosmetics manufacturing and sales segment grew strongly on strong sales growth of the imported Korean cosmetic brand Torriden and expanded sales from rebranding of core e-commerce cosmetic products. The life science segment underperformed due to a pullback after a large order in the year-ago quarter. Goodwill amortization and one-time costs from the consolidation of the Ikeda Bussan Group were recorded as an adjustment.
  • Pharmaceutical Business: The ethical drug segment saw sales growth for products like Clobetasol Propionate "Iwaki" driven by higher demand for generics, but profit was pressured by drug price cuts from the April 2025 drug price revision and rising raw material and outsourcing costs. The aesthetic medical segment performed well, with growing sales for core products including the NAVISION DR and illsera lines.
  • Chemicals Business: The surface treatment chemical segment grew revenue and profit from new customer acquisition for passive component chemicals in China and Asia, and recovering demand for printed circuit board chemicals. The surface treatment equipment segment also grew revenue and profit from sales, repair and maintenance of printed circuit board manufacturing equipment.
  • Social Impact Business: The business operates around the goal of developing a new regional economic model from Noto, through the healthcare and regional revitalization segments. The NAIA healthcare brand grew revenue via media coverage, e-commerce expansion, and expanded wholesale distribution, but recorded an operating loss due to spending on product development and brand awareness. The furusato NOW local tax service grew revenue 46% and reached break-even turned profitable. The Noto SDGs Fund has completed 16 cumulative investments, including its first investment in NOTO Naorai via the Noto Beyond Reconstruction Fund.

1. Fine Chemical Business: Revenue of 5.125 billion yen, an 8.7% decrease year-over-year, accounting for 36% of total consolidated revenue. Operating profit was 214 million yen, a 41.3% decrease year-over-year, with an operating margin of 4.2% (down 2.3 percentage points year-over-year).
2. HBC & Food Business: Revenue of 5.504 billion yen, a 49.8% increase year-over-year, accounting for 29% of total consolidated revenue. Operating profit was 265 million yen, a 27.5% increase year-over-year, with an operating margin of 4.8% (down 0.8 percentage points year-over-year).
3. Pharmaceutical Business: Revenue of 2.971 billion yen, a 5.1% increase year-over-year, accounting for 20% of total consolidated revenue. Operating profit was 260 million yen, a 26.7% decrease year-over-year, with an operating margin of 8.8% (down 3.8 percentage points year-over-year).
4. Chemicals Business: Revenue of 2.928 billion yen, a 32.6% increase year-over-year, accounting for 16% of total consolidated revenue. Operating profit was 376 million yen, a 177.3% increase year-over-year, with an operating margin of 12.9% (up 6.7 percentage points year-over-year).
5. Social Impact Business: Revenue of 28 million yen, a 239% increase year-over-year, with an operating loss of 70 million yen due to upfront investment spending.

• The company maintains its full-year 2026 November fiscal year forecast, with revenue growth expected to be led primarily by the HBC & Food business.
• Management targets record-high profit across all profit levels for the full year.
• Full-year operating profit is forecast at 3.4 billion yen, representing a 12.7% increase year-over-year. Profit growth is expected to come from profit expansion in the Fine Chemical business and the lapse of one-time costs recorded in the prior fiscal year.

• Fine Chemical Business: Tighter import restrictions in China have disrupted the supply of some imported products for the pharmaceutical raw material platform segment, hurting sales and profit. Delays in material sourcing and customer-driven delivery reductions have also hurt performance at the CDMO segment.
• Pharmaceutical Business: The 2025 drug price revision has reduced selling prices, while rising raw material and outsourcing costs have compressed profit margins for the ethical drug segment.
• Social Impact Business: Upfront investment spending on product development, brand building, and business expansion has led to operating losses for the segment in the quarter, even as revenue grows rapidly.
• HBC & Food Business: The life science segment faced a revenue and profit decline from the reversal of a large order booked in the prior year quarter.

No question and answer section is included in the provided earning call transcript.