To Our Shareholders
For the realization of our group philosophy,
“Growth” and “Progress” never stop.
We wish to express our gratitude to all our shareholders for your continuing support.
The Group is advancing the three-year Medium-Term Management Plan “SHIP VISION 2024,” with the final fiscal year set as 2024. As the second term (the fiscal year ended 31 March 2024), we will steadily advancing the steps of our “Growth” and “Progress” through operating high value-added business.
Consolidated financial results of this first half of the year
Towards the sales growth for the 25 consecutive years, this first half of the year achieved an increase in sales and profit of two digits.
The Total Pack Produce business shifted steadily. There are three factors; first, the number of projects of newly built hospitals and rebuilding hospitals has been steadily strong. Second, the performance of Kingrun Group which joined the group in July 2022, contributed from the beginning of the fiscal year. Third, some renewal projects were recognized earlier than planned. In addition, the Medical Supply business, the Lifecare business and the Dispending Pharmacy business also steadily grew toward achieving their goals.
Consequently, the Consolidated Financial Results of this first half of the year have continuously been tended to increase in sales and profit.
As a result, consolidated financial results of this first half of the year continue to tend to increase in sales and profit; net sales is 296.7 billion yen (increased 12.6% YoY), operating profit is 9.2 billion yen(increased 15.9% YoY) and ordinary profit is 10.1 billion yen (increased 34.9% YoY)
However, 2 consolidated subsidiaries in the Republic of the Union of Myanmar have been affected by the impact of US and EU financial sanctions and forced currency conversion by Myanmar government resulting from the military coup that occurred previously. Furthermore, with the recent strengthening of additional financial sanctions, it has become increasingly difficult to make payments or collections by foreign currency. Given the prospect of such circumstances continuing in the future, it has been determined that the originally anticipated excess earning power cannot be expected. As a result, the full amount of goodwill for Myanmar business, total of 2.6 billion yen, has been recognized as an extraordinary loss through impairment. Consequently, final profit (profit attributable to owners of the parent) of this first half of the year is 3.6 billion yen (down 11.0% YoY).
While geopolitical risks are always present in overseas business, we are committed to pursuing our Group Mission “Creating environments for medical professionals” and continuously contributing to development of the whole healthcare environment under our Group philosophy “SHIP”
In addition, regarding the full-year forecast, despite the impact of the Myanmar business, backed by the steady progress of the four main Businesses, we are working across the Group to maximize revenue and achieve the 25th consecutive year of revenue growth.
|Profit attributable to owners of parent
Progress of Medium-Term Business Plan
Our challenge, creating new values for regional healthcare, has steadily progressed
We are making steady progress towards achieving the medium-term business plan, focusing on four important measures set forth at its inception” Further growth of core business”,” Further expand value”,” Functional enhancement strategy” and “Activities for sustainability”. Concretely, starting from “consulting capabilities” and “producing capabilities”, which exploiting various know-how of whole Group, we continue to expand the circle of providing high quality and wide-ranging value to regional healthcare.
In the Total Pack Produce business, we have undertaken distinctive projects such as the integration of two hospitals into the regional core hospital, Kawanishi City Medical Center（relocated and opened in September 2022）, and Aile Home Clinic Nagaoka（opened in October 2023） as urban redevelopment project in front of the Nagaoka station, which aims to “contribution to urban development from medical care”. These are integrated projects by public and private sector. Under the concept of “Empower local medical systems in Japan” we will continue to support these regional cooperation.
In addition, as part of the Well-being business, we have secured comprehensive management operations regarding in total of 84 facilities, including elementary schools, junior high schools, kindergartens and nursery schools etc., which under jurisdiction of Suita city, Osaka (The contract term is 5 years, from October 2023 to March 2028).
In the Medical Supply business, we are particularly focused on “strengthening efforts for medical DX” . In the field of medical in Japan, under the leadership of “Headquarters for Medical Digital Transformation (DX) Promotion”, Japanese Government newly established, DX is promoted towards streaming services and improving quality. Our group anticipates these movements and support hospitals to improve their management and operation through visualizing SPD data and initiatives for creating future medical service basis by Industry, Government, and Academia（details are in page 3）
Challenges for creating new value for regional healthcare lead to the coexistence of certain social contribution and improvement of corporate values, leading us towards the long-term goal of achieving a consolidated net sales of one trillion yen.
We sincerely appreciate all of you for your continued support and encouragement.