Investment Bridge, one of Japan's leading IR services companies,
releases an updated "Bridge
Report" on FREUND
CORPORATION (JASDAQ:6312) reviewing its first half FY2/13 earnings
results and full year FY2/13 earnings estimates.
During the first half of FY2/13, sales and current profit rose by
24.0% and 119.0% year-over-year respectively. Machinery business sales
grew on the back of favorable demand from domestic generic drug
applications and expansion of its global business. Furthermore,
contracted manufacture of dietary supplements contributed to sales
growth of the chemicals and foods segment.
Full year estimates remain unchanged and call for 6.3% and 16.6%
year-over-year growth in sales and current profit. Despite high
attainment rates of full year sales and current profit target of 53.6%
and 75.9% respectively, estimates were left unchanged due to the
potential for delays in delivery of products and a stronger yen.
Capital investments both within and outside of Japan have become
active, and FREUND is expected to see continued strong earnings as it
implements measures to capture demand.
CORPORATION manufactures and sells granulating, coating, and drying
machinery used by the pharmaceuticals, foods, fine chemical and other
industries. The Company also manufactures and sells pharmaceutical
excipients, food preservatives, dietary supplement food materials, and
other products using its machinery. The company divides its sales
between two main divisions of the machinery business and the chemicals
and foods business segments.
The most recently released Bridge Report highlights the stronger than
expected first half earnings results including a 24.0% year-over-year
increase in sales to JPY8.67 billion due to strong demand from generic
drug manufacturers and favorable overseas sales. Sales of the machinery
segment and chemical and foods segment grew by 26.7% and 19.2%
year-over-year to JPY5.61 and JPY3.06 billion respectively. Gross profit
margin declined slightly due to the stronger yen, but restraint in fixed
costs allowed operating profit to rise by just under 2.1 times
year-over-year to JPY893 million. Sales and operating profit exceeded
previous estimates by 7.1% and 49.0% respectively.
The Bridge Report also highlights the fact that despite these stronger
than expected first half earnings, FREUND has left its full year FY2/13
earnings unchanged. Consequently sales and operating profit are expected
to rise by 6.3% and 12.7% year-over-year to JPY16.2 and JPY1.2 billion
respectively. The Company cites the potential for delays in product
deliveries and a stronger yen as the main reasons to maintain its
current earnings estimates.
At the end of the first half, total assets declined by JPY281 million
from the end of the previous term to JPY14.06 billion. Equity ratio
improved by 3% points to 61.3%.
To view the full report, please go to the following.
About Bridge Report:
Bridge Report is produced by Investment
Bridge Co., Ltd. and provides accurate and objective information
about the earnings, business strategies, and other information of
publicly traded Japanese companies.