Announcement of mid-term accounts

Announcement of the mid-term account settlements for the period ending March 2001

On the afternoon of November 16, we announced the mid-term account settlements for the period ending March 2001 at the Tokyo and Osaka Stock Exchange Press Club. The details are given here.

Fundamental Business Operations

With safety, quality, and the protection of the environment always at the forefront, our fundamental business methods of operation are aimed toward stressing foodstuffs, stressing production, stressing specialties over commodities, stressing intermediate products as well finished products, having a niche as well as being global, and providing proposals involving both what we call the "hard" (products) and "soft" (concrete strategies for use and application) areas. With these goals, the Fuji Group is expanding the field of food products based on plant extract oils and fats, and protein materials.

Mid to Long Term Company Operating Strategies

For this year's mid-term operating plans, we are aiming for the goals given below to promote growth and new enterprise under the slogan of "Endeavor for growth in the 21st century."
1. Being aware that over 50 percent of the world's population resides in China and Asia and concentrating on market expansion in our overseas groups.
2. Strengthening our domestic position with our newly established Kansai Chocolate Factory and Tsukuba Protein Foods Factory in the Kansai area.
3. Developing and expanding soybean-related enterprises resulting from our long-term involvement in research on soybean protein function.

Business Results

Despite facing a difficult mid-term period due to continuing stagnation in domestic demand, stability in the raw materials market, stability in exchange rates, and the results of our strong operational efforts allowed us to beat our previous record highs for operating profit and pre-tax profit for both our consolidated and non-consolidated enterprises.

Results for the mid-term of the period ending March 2001
(April 1, 2000 to September 30, 2000)

(1) Consolidated Business Results

(2) Non-consolidated Business Results

Estimated results for the period up to March 2000

<<Operating Report>>

Overall, conditions concerning plain chocolate for confectioneries and frozen sweets, confectionery and bread ingredients, water-soluble soy polysaccharides, and more, moved in a favorable direction. However, due to the high yen and fall in market price for raw materials, the reduction in sales prices led to a fall in consolidated net sales. Non-consolidated net sales increased slightly.

On the profit side, both consolidated and non-consolidated operating profit and pre-tax profit managed to surpass previous highs. The consolidated mid-term net profit saw a reduction in profits due to the inclusion of half of a 3.8 billion yen insufficiency caused by changes in the accounting standards regarding retirement pay obligations as a special loss.

After calculating the deficiency for retirement pay obligations and the accumulated losses of 2.1 billion yen from the consolidated used for financial affairs improvements as special losses, the non-consolidated mid-term net profit showed a large fall in net profits. Now that these accumulated losses for the consolidated have been finished with and put in the past, they will not influence this fiscal year's settlement of accounts.

After looking over the whole year and considering the results of the mid-term, our aim is: 142 billion yen net sales, 11.5 billion yen pre-tax profit, and 3.8 billion yen net profit for consolidated, and 95.5 billion yen net sales, 10.5 billion yen pre-tax profit, and 2.4 billion yen net profit for non-consolidated.

<<Summary of Operation by Division>>

Oils and Fats division

Domestically, the drawn out consumer slump and fall in market sales prices has led to a reduction in overall number of sales and net sales. Amongst these however, palm oils, which function as an important main ingredient, frying oils, processed oils, and so on, which we have actively developed uses for and implemented positive business strategies for, have increased in number of sales and shown a change for the better on the accounts front. In our overseas actions, with the improving economic conditions in South East Asia, our Singapore Group has shown improvements, and increases in sales have resulted in China, Malaysia, and elsewhere. With the fall in sales prices and drop in local currency, and the strong yen reducing the currency conversion, consolidated net sales fell.

Foods division

The confectionery and bread-use materials divisions saw a change for the better assisted by a recovery of the summer demand for every kind of chocolate and frozen-use chocolate and the increased awareness of consumers to the healthy aspects of chocolate. Every kind of cream, margarine, and so on, also showed improvements due to the development of new products, the promotion of new business proposals, and the development of new markets. Overseas production saw every kind of confectionery use manufactured goods extending their numbers of sales.

Protein division

Soybean protein foods such as hamburgers, "ganmo," and frozen tofu, assisted by our new product lines, saw continuing improvements for both manufacture and family use. The functional uses of water-soluble soy polysaccharides extracted from "okara" have been widely accepted and these showed improvements. Soy protein materials for ham and sausage saw a drop in sales in the domestic market influenced by the troubles over food quality during the summer; however, overseas groups saw improvements.