Daiichi Sankyo aims to double profit in 3 years

Daiichi Sankyo aims to double profit in 3 years

Tokyo: Daiichi Sankyo, Japan’s third-largest drugmaker, said on Friday it aims to nearly double its annual operating profit and increase revenue by a fifth in three years as it expands sales, especially overseas.

Daiichi Sankyo bought a majority stake in Ranbaxy Laboratories in 2008 to diversify its operations into generic drugs and emerging markets, and is also looking to blood thinner Effient, developed with Eli Lilly, to fuel further growth.

Its shares rose 1.3% on the news, roughly in line with Tokyo’s pharmaceutical subindex.

The company is targetting ¥180 billion ($2 billion) in operating profit for the year ending March 2013 on revenue of ¥1.15 trillion.

It expects overseas sales to account for 56.5% of overall revenue, a climb of almost six percentage points.

“The numerical targets gave me the impression of being a bit aggressive, although I don’t think it’s impossible to achieve them," said Kenji Masuzoe, analyst at Deutsche Securities.

Analysts on average expect Daiichi Sankyo to generate an operating profit of ¥138 billion on revenue of ¥1.06 trillion in the year to March 2013, according to a poll by Thomson Reuters.

“The company’s mid-term targets are definitely not an incentive to sell Daiichi Sankyo shares, while the question of when to buy the shares at what levels depends on more details," he said.

Daiichi Sankyo president Takashi Shoda will brief on the company’s business plan later on Friday.

The firm also said it is aiming for a return on equity of 10% or more and earnings per share of ¥140 or more in that financial year, against 5.2% and ¥63.9 estimated for the current year.