Let me introduce our presenters today. Shoji Miyazaki is our Chief Executive Officer, and Frederick Reidenbach is our Chief Financial Officer. After hearing presentation from these two presenters, we have a question and answer session scheduled. Now I will turn it over to Miyazaki, our CEO.
Hello to all. My name is Shoji Miyazaki. I am a Representative Director and CEO. Today, I, along with our CFO, Fred Reidenbach, will explain about our performance for the first quarter of this fiscal year and the revised earnings forecast for the year. Thank you very much again. First, I'd like to give you an overview of our business performance for the quarter. Our consolidated revenue was strong for the first quarter, showing approximately 1% year-on-year growth. On the other hand, we consider the underlying revenue to be an important metric, which excludes impacts from COVID-19 and foreign exchange.
We saw a positive impact from foreign exchange in the first quarter of this year and the strong COVID-19 tailwinds in the first quarter of last year. Underlying revenue, excluding these impacts, showed approximately 4% year-on-year growth. Meantime, our profit in the first quarter exceeded the forecast presented in May but decreased year-on-year. Our profit. Operating profit was JPY 2 billion, and adjusted EBITDA was JPY 12.5 billion. The main drivers of these results are the impact of the inflation seen in all businesses and the gradual decrease in the number of PCR tests we conduct in Japan and its reimbursement price decline in Japan and the decrease in the unit price of BGM sensors. There was the lockdown in Shanghai in China that has had an impact on Epredia and Biomedical business units.
In addition, there was a loss of JPY 6.2 billion from a mark-to-market evaluation of convertible notes that we hold in Senseonics. As a result, the net income attributable to owners of the parent company for the first quarter was a loss of JPY 7.1 billion. As for this year's earnings forecast, we expect solid revenue to continue throughout the year. We received strong demand in biomedical business for its ultra-low temperature freezer and life science research equipment, including CO2 incubators, and the orders being placed for these products are far exceeding the forecast. At the same time, we recognize that our management challenge is to respond to the continuing inflation and to proceed with the turnaround of Epredia business firmly and as intended.
For our updated earnings forecast, we have increased revenue by JPY 15 billion, operating profit by JPY 7.5 billion and adjusted EBITDA by JPY 4.6 billion from the forecast in May and expect cash-based net income attributable to owners of the parent company to be JPY 31 billion. Our CFO will explain the details of these numbers later. This is an earnings call today, but I'd like to take this opportunity to explain a few important topics related to the direction we pursue in our company management and finance, financial performance. In the previous earnings call in May, I talked about turning around the business and driving growth is our fundamental policy. I'd like to provide some updates on those. First, on turning around the business, I'd like to explain about our Epredia business and headquarters cost reduction efforts.
About Epredia, in the months of April and May, there was a loss from manufacturing suspension due to the lockdown of our Shanghai plant and the decreased sales. It recovered from June onwards, and the first quarter revenue for the business was stronger than the same period of last year and the May forecast, partially due to the favorable impact of foreign exchange rate. The challenge for this business is rising costs and securing profits in this environment. In addition to implementing further price hikes and charging for product warranty services, we will strive to secure profits by diligently implementing cost reduction efforts through promotion of consolidated purchasing, saving transportation costs, and by cutting investments in SG&A expenses, other than for the purposes of sales promotion. We will continue to update you on these topics, including turnaround of Epredia. The other is about reducing headquarters costs.
As we released a notice in May, we are currently offering early retirement program for headquarters functions of PHC Holdings Corporation and PHC Corporation. We also reduced headquarters costs in the U.S. by reorganizing headquarters structure. Through these efforts, we expect to realize the total cost reduction of JPY 2 billion in the headquarters space. On the next slide, as the update on our growth strategy, I'd like to explain about our new products and services that will contribute to the future growth of our business. In life sciences and diagnostics domain, we developed a prototype of a live cell metabolism analyzer and exhibited it at the recent PharmaLab Expo TOKYO to make a major step into the area of cell and gene therapies, which we position as a future growth area, and it was highly valued and well-received by the researchers who attended the exhibition.
We also introduced various lineup of slide scanners by alliance with 3DHISTECH in the digital pathology space. In healthcare solutions domain, as part of our efforts to accelerate healthcare digital transformation, we launched a solution with functional linkage between our electronic medical record system, Medicom-HRf, and AirWAIT, which is a reception management application provided by Recruit Holdings Co., Ltd. to improve the operational efficiency of healthcare professionals. In addition to enhanced telemedicine services, we expanded the product lineup of Teladoc Health, Inc., a real-time telemedicine system, and newly launched a product known as Mini Tabletop. In diabetes management domain, we launched 180-day CGM, Continuous Glucose Monitoring system of Senseonics Holdings, Inc., branded as Eversense E3 in the U.S. market in April.
We also obtained E.U. MDR certification for our motorized drug delivery device or electronic injector, which will help reduce patient's burden and enable more efficient treatment of rheumatoid arthritis and other conditions. We launched this product globally for the first time in the industry. As I stated in the previous sessions, we will continue to rigorously implement these turnaround and growth strategies based on the basic policy that we have set forth. This is all for my explanation. I will now hand over to our CFO, Fred Reidenbach. Fred, please.
Thanks. Thank you to everyone, and thank you to Miyazaki-san for joining us today. I am Frederick Reidenbach, and I am the CFO of PHC Group. In the next few slides, I really want to cover three key areas. First, I will review the key drivers for this quarter's performance. Then I'll walk you through how the quarter's results were affected by COVID-19 and other one-time items while providing an update on the balance sheet and the status of our goodwill. Finally, I'll review our updated forecast for this fiscal year. On slide seven, we can see the company-wide results for the first quarter. You know, to better really understand the seasonality of our business, we have included Q1 of fiscal 2020.
Q1 tends to be our slowest quarter as budget spend by our customers in Japan tends to be low after fiscal year ends at March 31, and budget spend by customers outside Japan tends to not be as strong in the first half of the calendar year. Spend in Japan tends to accelerate in Q3, with the largest portion coming in Q4 as customers seek to use their budgets. Whereas American and European customer orders tend to accelerate from July, with the largest volume coming in the October to December period. This results really in Q3 and Q4 being our strongest quarters and Q1 our weakest.
Now if you look at the slide, you can see most of the increase you see on this slide in fiscal 2021's Q1 revenue versus fiscal 2020 was due to the positive COVID tailwinds in fiscal 2021 versus the significant headwinds we saw in Q1 of fiscal 2020. Despite the strong comp due to COVID-19, our reported revenue in Q1 increased by 0.7% year-on-year to JPY 81.5 billion. In Q1, though, the average exchange rates were JPY 138 to the U.S. dollar and JPY 138 to the euro. The weakening of the yen versus prior year resulted in a favorable foreign exchange revenue impact to JPY 4.5 billion.
This was offset, as Miyazaki-san just noted, by a net revenue decrease of JPY 5.7 billion due to COVID-19. After excluding these factors, our underlying revenue increased by 4% year-on-year. Operating profit decreased 64% year-on-year to JPY 2 billion. The drop really was mainly due to three reasons. First, as Miyazaki-san mentioned earlier, our gross profit margin was negatively affected by a combination of factors such as rising raw material and freight prices across our businesses, declines in reimbursement rates on our PCR testing, and the impact of the lockdown of a previous Shanghai factory in China in April and May due to China's zero COVID policy. Secondly, we saw a rise in G&A expenses, but this was almost exclusively due to FX.
Lastly, offsetting these headwinds, we did see decreases in our one-time expenses and depreciation, which I will go over when we get to slide fourteen. Profit before tax and attributable to the owners of the parent company came down JPY 20.4 billion and JPY 17.5 billion respectively. There were three factors driving this drop over what I just noted. First, the fair market valuation loss on our investment in Senseonics in the amount of JPY 6.2 billion. This is versus a profit of JPY 8.7 billion reported in the same period of the prior year. Secondly, we saw an increase in our U.S. dollar and euro interest expense due to the movement in FX rates. Lastly, there was an FX loss realized on the revaluation of an unhedged euro-denominated loan.
The combination of the above resulted in our adjusted EBITDA decreasing by JPY 4.6 billion to JPY 12.5 billion, and EBITDA by JPY 3.9 billion to JPY 9.6 billion. Our profit attributable to owners of the parent on a cash basis showed a loss of JPY 300 million for the quarter. A reconciliation of this to profit attributable to owners of the parent company under IFRS is provided on slide 13. Before I go into a review of revenue by business segment, I would like to touch on our strategic partnership with Senseonics, with whom we have an exclusive global commercial agreement in our diabetes management domain. On slide eight, if you could turn to slide eight, please, is an overview of the note issued to Senseonics going back two years when it was executed.
In August 2020, to obtain the exclusive sales right for an implantable CGM product that can be used continuously for an extended period, we provided the note of JPY 3.7 billion with the right to convert to shares of Senseonics. Because the value of the stock conversion right fluctuates with the stock price, under IFRS, we must revalue the position at fair market value on a quarterly basis, with changes in value reflected in our quarterly earnings statement. The bottom table shows the transition of this valuation allowance over the last eight quarters. What I would like to mention here is that although losses were recorded from the second quarter of fiscal 2021, the carrying value of JPY 9.7 billion as at the end of June still exceeds our investment value by approximately JPY 6 billion.
In the first quarter, we marked the position down from $1.9 to $1.03. This resulted in an unrealized loss of approximately JPY 6.2 billion. However, I do want to point out here that Senseonics' share price has already rebounded to $1.96 as of August eighth, fully offsetting the loss that was reported in Q1. The rise in price, though, has not been reflected in the revised forecast we'll be going over later, as we have taken the position not to project share price movements in forecast revisions. Slide nine explains the performance of the five business units within our three domains. First, Diabetes Management's revenue increased JPY 200 million year-on-year to JPY 26.5 billion.
Despite a positive impact due to favorable foreign exchange rates, the increase in revenue was limited, mainly due to a decrease in the unit sales price of our BGM sensors in mature markets. Underlying growth in this business decreased 5% year-over-year, slightly above what we had incorporated into our business plan. LSI Medience's revenue decreased JPY 1.1 billion to JPY 22.9 billion. The drop was mainly due to a JPY 2.8 billion decrease in PCR revenue due to a drop in the number of tests performed during the quarter and a decline in their related reimbursement rates. Despite the drop, underlying growth was 3% year-over-year due to a strong rebound in our clinical testing business.
Medicom's revenue increased JPY 300 million year-over-year to JPY 8.1 billion due to the positive impact from the introduction of the online eligibility verification system promoted by the Japanese government, coupled with very strong sales of our system supporting major pharmacy chains. These increases were able to offset the loss of COVID-19 tailwinds experienced in Q1 of the prior year. Epredia's revenue increased by JPY 900 million year-over-year to JPY 10.1 billion. Positive foreign exchange impacts and the recovery in sales of consumer goods and glass products outweighed the impact on the business due to the factory lockdown in Shanghai I just mentioned. Lastly, Biomedical's revenue increased JPY 600 million year-over-year to JPY 13.3 billion.
This increase was primarily due to a sales recovery of dispensing support equipment in Japan and the acquisition of new projects supporting our customers in the establishment and the expansion of their life science research facilities. On slide 10. We have provided a revenue bridge to help explain the change in Q1 revenue versus same period of the prior year. Our underlying revenue increased by 4% year-on-year after adjusting for a net revenue decrease of JPY 5.7 billion due to COVID and a favorable foreign exchange impact of JPY 4.5 billion. The growth in the quarter came from our Diagnostics and Life Sciences and our Healthcare Solutions domain. Diabetes Management's drop of JPY 1.4 billion corresponds to the 5% core growth decline I noted on the previous slide. Slide 11 covers adjusted EBITDA results by domain.
Diabetes management adjusted EBITDA decreased by JPY 600 million year-on-year to JPY 8.3 billion. Most of the drop, though, was due to the decrease in the unit price of our BGM sensors, which I mentioned. Coupled, though, with an increasing sales and marketing expenditure base, predominantly in the U.S. to strengthen our CGM sales capability. This increase, though, was expected and reported as part of our fiscal 2022 business plan, which we reviewed in our briefing in May. Adjusted EBITDA for healthcare solutions decreased by JPY 1.5 billion year-on-year to JPY 4.8 billion. This drop came in our LSI Medience business unit due to the decrease in the number and reimbursement price of PCR tests. The drop was in accordance with what we had in our fiscal 2022 business plan.
From July, PCR tests have increased due to the rapid increase in COVID-19 infections in Japan. However, given the difficulty in predicting this trend for the remainder of the year, we have not reflected any upside in the revised forecast. To offset the drop in margins in this business unit, we continue to work on cost reduction efforts. Lastly, adjusted EBITDA in the diagnostics and life sciences business decreased by JPY 1.1 billion to JPY 2.9 billion. Biomedical's EBITDA was mostly flat as favorable foreign exchange effects and the acquisition of new projects offset a JPY 1.4 billion drop in COVID-related ULT sales. Epredia's EBITDA was down due to the negative effects on the business unit's gross profit margin caused by the factory shutdown in Shanghai and inflation seen in direct material and freight.
However, from Q2, we expect to see a gradual recovery in Epredia's gross profit margin as price increases are beginning to flow through and our Singapore and our Shanghai factory is now fully back online. Like revenue, we have provided on slide 12 a bridge to explain the change in adjusted EBITDA in Q1 of this year versus prior year. Our underlying adjusted EBITDA decreased by 6% year-on-year after adjusting for a net decrease of JPY 4.3 billion due to COVID and a favorable foreign exchange impact of JPY 0.7 billion. The largest portion of this drop was caused by increases in headquarters costs. As Miyazaki-san noted at the beginning of the call, we have already taken actions to significantly reduce these costs in both the United States and Japan.
On slide 13, we have provided an update of the estimated impact of COVID-19 on our Q1 results relative to prior year, as well as an updated forecast for this fiscal year. In the first quarter, the company had a net sales tailwind of about JPY 1.3 billion, which generated adjusted EBITDA of about JPY 200 million. This compares to a net sales tailwind of JPY 7 billion in the same period last year, which generated adjusted EBITDA of JPY 4.5 billion. The positive tailwind of JPY 3 billion seen in the quarter was due to PCR testing in LSI Medience and s- and ULT sales in our biomedical business unit. The headwind of JPY 1.6 billion was due to reduced esoteric testing in LSI Medience and lost sales due to the lockdown of Epredia's factory in Shanghai.
For the full year, we now expect net sales tailwinds to shrink from JPY 22.7 billion to JPY 7.5 billion. This is, though, up from the JPY 5.8 billion in our original fiscal 2022 business plan. We are revising our annual forecast mainly in two areas. First, in our biomedical business unit, we are increasing our forecast due to additional customer demand for ULTs to cover COVID vaccine development, storage, and transportation. On the other hand, we are taking down Epredia for the lost sales due to the factory shutdown in Shanghai. The impact on the adjusted EBITDA for the full year is now expected to be JPY 2.1 billion.
This is a significant decrease from the JPY 14.8 billion reported in the previous fiscal year and is actually JPY 1.5 billion below the JPY 3.6 billion expected in our fiscal 2022 business plan. The drop versus the business plan is almost exclusively due to the unabsorbed costs related to the lockdown of Epredia's Shanghai factory. Slide 14 provides a reconciliation from operating profit to adjusted EBITDA and a conversion of IFRS reported profit attributable to owners of the parent to a cash basis. The only material items between operating profit and EBITDA shown in the top half of the slide is depreciation, which decreased year-on-year. Between EBITDA and adjusted EBITDA, there are several items I would like to point out. First, we had structural reform expenses of almost JPY 2 billion.
JPY 1.7 billion, of which was incurred in the headquarters. These relate to the early retirement support programs offered in Japan and the downsizing of our U.S. headquarters. Next, the one-time special compensation of JPY 1.2 billion includes, in the headquarters, a portion of the retirement allowance paid to our former CEO, which was approved at our recent shareholders meeting. Lastly, there was a profit of JPY 1 billion recorded in the other line in diagnostics and life sciences. This relates to the termination of the transitional services agreement entered into as part of our acquisition of Epredia. In the operational integration after that acquisition, we signed a contract to receive business continuity services with the prior owner of the business. This contract was fully terminated in Q1, with the final payment being less than what we had accrued.
In the bottom of the slide, we've provided a reconciliation of profit attributable to owners of the parent company between an IFRS basis and a cash basis. Adjustments from the IFRS presentation include three items. First, the amortization expense of M&A related intangible assets. The approximate JPY 280 million increase versus prior year is due to the change in FX rates this year versus last year. Secondly, the impairment loss on Senseonics, on the Senseonics note I explained previously. Finally, the income tax related effect on these adjustments. For the quarter, we reported a cash-based loss of JPY 300 million. Let's now turn to slide 15 to review the results of CapEx and depreciation expense and research and development costs.
CapEx for the quarter was JPY 3.4 billion, and depreciation was JPY 7.4 billion, both almost exactly in line with the last quarter in Q1 of fiscal of the prior year. R&D expenses, though, were down about JPY 700 million. They came in at JPY 2.4 billion. However, the entire drop here relates to the closure of our Valhalla research facility from the beginning of Q2 last year, as a decision was made to partner with Senseonics on the development and rollout of CGM. We do expect CapEx and R&D to continue to run at these levels for at least the remainder of this year. Slide 16 shows a summary of our consolidated cash flow statement.
In the quarter, our cash and equivalents balance decreased JPY 13.1 billion from JPY 95.2 billion at the end of March to JPY 82.1 billion at the end of June. Operating cash flow was positive at JPY 1.9 billion. The reported loss before tax was JPY 6.3 billion. However, this was mostly due to the mark-to-market loss on our Senseonics investment. After adding depreciation and amortization to the net of these, it shows an operating cash increase of about JPY 7.3 billion before taking into consideration the additional usage of working capital. Working capital usage increased by JPY 5.5 billion. However, the bulk of this increase is due to a JPY 4.2 billion withholding tax payment made in Japan.
This amount has already reversed in Q2 with the filing of our fiscal 2021 tax returns. Investing cash outflows came in at JPY 5.2 billion, with the majority related to CapEx. Lastly, financing cash outflows of JPY 11.9 billion were mainly driven by ongoing repayments of long-term debt of JPY 6.4 billion and our recent dividend payment of JPY 44.2 billion, which is included in the JPY 5.2 billion reported under dividends, et cetera, on this slide. On slide 17, we have provided a summary of our balance sheet. Overall, there were no material changes in our consolidated balance sheet from March 31 to June 30th.
On the asset side, other than the JPY 13.1 billion cash decrease, which I just went over, and an increase in goodwill and intangible assets of JPY 14.8 billion, there were no other material changes in our total current or non-current assets. The increase in goodwill and intangible assets is almost exclusively due to the impact of currency translation, as most of these assets are denominated in U.S. dollar and euro, less the JPY 3.2 million amortization shown on slide 14. Like on the asset side of the balance sheet, there was next to no change in our total current or non-current liabilities. The current and long-term portions of loans payable increased by JPY 3.9 billion, from JPY 307.9 billion-JPY 311 billion.
Again, this increase was due to a JPY 10.3 billion currency translation impact offset by the JPY 6.4 billion prepayment noted on the cash flow summary. The drop in our Q1 adjusted EBITDA versus Q1 of the prior year, coupled with the decrease in cash and the higher loan balances due to FX, resulted in our net leverage ratio rising to 3.4 x. Now, before moving into the updated forecast, I would like to take some time to talk about the status of the goodwill on our balance sheet. On slide 18, we've provided a summary. As reported with our year-end results, Pathology's prior goodwill was impaired at the end of last year to the point where the business unit's discounted future cash flows were the same as the business unit's book value.
Working with our auditors, it was determined that no trigger event occurred at the end of Q1. However, as Miyazaki-san reported up front, we strongly recognize and understand that it's essential to ensure the implementation of turnaround measures in this cash-generating unit to prevent any further write-downs. Regarding clinical testing or LSI Medience, although the discounted future cash flows were higher than the book value at March 31 by around JPY 560 million, the recent BA.5 variant surge and any follow-on surges in Japan has the potential to negatively affect this cash-generating unit, like we saw at the beginning of COVID two years ago. To prevent any potential impairment, we are looking at ways to both enhance our competitiveness in PCR testing, as well as further reductions in cost to secure and improve future profits and free cash flow.
Last, we have determined that the likelihood of impairment in Diabetes Management and Medicom is highly unlikely given the respective headroom at March 31 and the profits and cash generated by these cash-generating units. From here, I'd like to explain the updated forecast for this fiscal year. Slide 20 provides a summary of our updated forecast. First, regarding exchange rates, we have raised our annual average assumption to JPY 128 to the dollar and JPY 136 to the euro. The rise in rates has a positive impact on both revenues and profits. You can see that we are revising revenues upwards to JPY 350.2 billion, an increase of JPY 15 billion from the previous forecast, the majority of which is due to the change in the FX rate assumption.
We are revising our operating profit forecast upwards by JPY 7.5 billion. This increase is comprised of positive benefits of JPY 11.5 billion, offset by SG&A cost increases of about JPY 3.1 billion. The JPY 11.5 billion increase is due to two factors. First, the flow-through on the incremental sales of JPY 15 billion and the amount of JPY 7.7 billion. Secondly, a reduction in the expected one-time costs of about JPY 3.8 billion as we have reduced our one-time cost assumption from JPY 10.4 billion to JPY 6.6 billion, as we now expect to be able to keep costs related to the downsizing at the head office to be well below the original plan. These benefits, though, were offset by about a JPY 3.1 billion increase in SG&A expense.
Although almost all of which is due to the change in the FX rate assumptions. We are holding our profit before tax at JPY 22.8 billion. This is a small drop of JPY 100 million from our original business plan. The drop is calculated by reducing the above operating profit increase of JPY 7.5 billion by three items. First, the JPY 6.2 billion fair market valuation loss on the Senseonics convertible note. Secondly, a JPY 700 million increase in unrealized FX losses reported in Q1 on the unhedged euro-denominated loans. Finally, a JPY 800 million increase in the interest expense, of which 25% is due to the change in FX rate assumptions and 75% related to projected increases in interest rates on our U.S. dollar and euro-denominated debt.
We are adjusting adjusted EBITDA by four points upwards by JPY 4.6 billion. This comprised of the JPY 7.7 billion flow-through on the incremental 15 billion of sales, less the JPY 3.1 billion increase in SG&A expenses due to the change in the FX assumptions. EBITDA is being adjusted by JPY 8.3 billion. This is comprised of the JPY 4.6 billion increase in adjusted EBITDA, plus the JPY 3.8 billion of additional savings and reduced one-time costs. The net of the above increases our cash-based profit by about JPY 4.4 billion. On slide 21, we have provided updated forecasts by domain. In the interest of time, I will not go into this slide in detail, but I'm happy to answer any questions you may have later.
Lastly, on slide 22, we have provided an FX sensitivity analysis to show the effect a JPY 1 movement versus the U.S. dollar and euro has on our revenue and operating profit. We are focused on these currencies as these, coupled with yen, make up approximately 85% of our revenue and 70% of our operating profit. I will end my presentation here and turn it back to Miyazaki-san, but I do look forward to answering any questions you may have. Thank you.