News Release

2008.11.6Announcement of the Settlement of Accounts for the Second Quarter of the Year Ending March 2009

(Note) Figures shown have been rounded down to the nearest million yen

Our settlement of accounts for the second quarter of the year ending March 2009 was announced on the afternoon of Thursday, November 6 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Consolidated Results for the Second Quarter of the Year Ending March 2009
(April 1, 2008 to September 30, 2008)

Consolidated operating results (total)

(% is in comparison to the previous year)

  Net sales Operating income Ordinary income Net income
(millions of yen) (%) (millions of yen) (%) (millions of yen) (%) (millions of yen) (%)
Second quarter of the
year ending March 2009
116,188 4,865 4,476 3,001
Second quarter of the
year ending March 2008
98,193 11.2 2,277 (26.2) 1,986 (26.7) 1,063 (21.3)

*From this business term, "Accounting Standards Relating to Quarterly Financial Statements" (Corporate Accounting Standards no.12) and "Application Guideline for Accounting Standards Relating to Quarterly Financial Statements" (Application Guideline for Corporate Accounting Standards no.14) have been incorporated. The financial statements for the quarter were made adhering to the "Regulations for Consolidated Quarterly Financial Statements". Thus, the year-on-year difference cannot not be displayed with accuracy (except within the same financial term).

Overview of the FY 2009 first half (For the six months ended September 30, 2008)

(Year-on-year figures are shown only as reference)

For the first half of FY 2009, an increased sense of stagnation prevailed for Japan's economy due to sluggish exports, etc., mainly caused by the US economic slowdown.
Food industry in which we are placed continued to experience heightened demand for food safety and security while escalation in the raw material prices persisted to put us in a harsh cost environment.
Amid such business background, our group continued promoting the new medium-term business plan, "Innovation and Action 2010", and engaged in business restructuring through various measures including the adoption of the company system.
We are further promoting these measures with special emphasis on the food safety and security issues. We also responded to the record-high increase in raw material prices by making price revisions both domestically and internationally, as well as by actively engaging in cost reductions.
For the consolidated results of the first half of FY 2009, we achieved net sales of 116,188 million yen (18.3% y-o-y increase), operating income of 4,865 million yen (113.7% y-o-y increase), ordinary income of 4,476 million yen (125.4% y-o-y increase), and net income of 3,001 million yen (182.3 y-o-y increase).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, both sales and profit increased, a contrast compared to the sharp decline recorded in the previous year. This owes to the fact that sales of palm oil and coconut oil continued to grow in the fats for general processing category, including fats for frying. Review of the underperforming products also contributed to the positive results. In addition, the relatively steady growth of specialty products such as hard butters for chocolate and functional oils contributed to gains in income in the domestic market.
As for the overseas subsidiaries of the business, improvements in profitability seen in the refining segment in Asia and US in addition to continued excellent results achieved in the US and European markets from products such as hard butters for chocolate contributed to the increase both in sales and profit compared to the previous year, among other factors.
Through these efforts, this division achieved a sales volume of 52,674 million yen (39% y-o-y increase) and an operating income of 3,373 million yen (228.8% y-o-y increase).

<Confectionery and Baking Ingredients Division>
Domestically, chocolates for industrial use, including chocolate for ice creams, enjoyed steady growth, which resulted in the increase both in sales and profit compared to the previous year. Creams, margarines/shortenings, and fillings also experienced growth in sales. However, profit decreased due to the high raw material cost. Imported confectionary and baking ingredients experienced a decline in net sales compared to the previous year because of such market factors as overseas prices for some dairy products exceeding domestic prices.
Both net sales and profits decreased compared to the previous year for dessert products from our domestic subsidiaries due to such reasons as skyrocketing raw material prices, etc.
Profit decreased for our overseas subsidiaries for this division, due to the price increase of dairy products and so on.
As a result, this division achieved a sales volume of 44,593 million yen (7.1% y-o-y increase) and an operating income of 1,644 million yen (a decrease of 19.1% y-o-y).

<Soy Protein Division>
Domestically, soy protein ingredients achieved the same level of net sales and profits compared to the previous year, thanks to cost reduction efforts and steady growth seen in products for fermentation and culture medium markets. In other countries, our subsidiary in China in this division experienced decline in sales because of merger and abolition of factories but maintained profits by reviewing the nonperforming products.
Profits for soy protein products improved with our continued efforts to improve production efficiency and cost reduction, though the sales compared to the same period last year was about the same.
With our efforts for cost reduction, both sales and profit for soy peptide maintained the previous year's level.
Water-soluble soy polysaccharides recorded increases in both net sales and profits due to the steady sales growth for acid lactic beverages.
Soy milk improved profitability from cost reduction and pricing revision among other positive factors such as mass volume sales recovery.
For mail orders, y-on-y profit improved as a result of cost-cutting efforts, though sales improvement was difficult to achieve since no new product was launched.
Through these efforts, this division recorded a sales volume of 18,920 million yen (an increase of 1.4 % y-o-y) and recorded an operating loss of 152 million yen (an operating loss of 779 million yen was recorded in the previous year).

Predictions for Consolidated Results for the Year Ending March 2009
(April 1, 2008 to March 31, 2009)

(% is in comparison to the previous year)

  Net sales Operating income Ordinary income Net income
(millions of yen) (%) (millions of yen) (%) (millions of yen) (%) (millions of yen) (%)
Full Year 250,000 16.8 9,600 25.4 8,600 (24.1) 5,200

(Note) Revisions for forecast consolidated figures were not made this quarter

*The forecasts above have been made based on the information available at the time of this announcement, and the actual results may differ from these forecasts due to various factors.

End of report

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