Notice Regarding Recording of Extraordinary Loss (Impairment Loss), Revision of Full-Year Earnings Guidance, and Differences Between Individual Earnings Forecast and Previous Fiscal Year Results

Regarding Recording of Extraordinary Loss (Impairment Loss)

Kobayashi Pharmaceutical Co., Ltd. has decided to record an impairment loss on fixed assets totaling 14,645 million yen for the fiscal year ending December 2025: 13,437 million yen related to the new Sendai factory in Taiwa Town, Kurokawa District, Miyagi Prefecture, and 1,207 million yen related to the Thai factory of its manufacturing subsidiary in Thailand. The Sendai new factory requires more time and costs than initially anticipated to comply with pharmaceutical manufacturing guidelines and to strengthen the quality control system, resulting in a recognized decline in profitability. The Thai factory also requires additional time to establish quality control and a stable production system, with expected profitability decline.

Revision of Full-Year Earnings Guidance and Differences in Individual Performance

Based on the recording of these extraordinary losses, the consolidated full-year earnings guidance for the fiscal year ending December 2025 has been revised. Net sales are forecast to decrease by 3.1% from the previous forecast to 165,700 million yen. Operating income is expected to increase by 6.4% to 14,900 million yen, and ordinary income is expected to rise by 10.5% to 16,900 million yen. However, net income attributable to owners of parent is sharply revised downward by 65.7% to 3,600 million yen. Individual results are also expected to fall below the previous fiscal year in terms of net sales, operating income, and net income. There is currently no change to the dividend forecast.