News Release

Financial results


Announcement of the Settlement of Accounts for the Year Ending March 2008


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

Our settlement of accounts for the year ending March 2008 was announced on the afternoon of Thursday, May 8 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Conditions Influencing the Results

In the midst of the challenging cost environment regarding raw materials that surround the food products industry, efforts to strengthen food safety assurance are increasingly in demand due to recent issues concerning false labeling of food products.

Positioning the assurance of "safety, product quality, and environmental integrity" as prerequisites of management, our group adopted "enhancement of core businesses" , "acceleration of overseas development" and "thorough compliance" as new issues of management, and engaged in our continued efforts to become a trustworthy corporation, in addition to strengthening our competitiveness and development abilities in core business, expansion of overseas operations, and proposal-oriented marketing.

Consequently, for the annual term ending March 2008, we achieved net sales of 214,079 million yen (15.8% y-o-y increase), an operating income of 7,655 million yen (7.9% y-o-y increase), ordinary income of 6,931 million yen (6.7% y-o-y increase), but marked net loss of 841 million yen (y-o-y net income was 3,259 million yen) due to extraordinary losses relating to the soy protein business.

Consolidated Results for the Year Ending March 2008 (April 1, 2007 to March 31, 2008)
[Consolidated operating results]

  Net sales
(millions of yen)
Operating income
(millions of yen)
Ordinary income
(millions of yen)
Net income
(millions of yen)
Year ending March 2008 214,079 7,655 6,931 (841)
Year ending March 2007 184,910 7,095 6,498 3,259
Growth rate 15.8% 7.9% 6.7% -

[Breakdown of Results by Division]
<Oils and Fats Processing Business>
Domestically, fats for frying struggled, but the sales of specialty products such as hard butters for chocolate and functional oils led to substantial growth in sales. Net income, however, decreased compared to the previous term due to high material prices.

Products such as hard butters for chocolate continued to do well overseas, especially in the US and European markets, contributing to substantial increase in profit and sales.

Through these efforts, this business group achieved a sales volume of 86,486 million yen (y-o-y 29.1% increase). The operating income increased from the previous year, as our overseas companies compensated more than sufficiently for the decrease in domestic profit, to 4,084 million yen (16.9% y-o-y increase).

<Confectionery and Baking Ingredients Business>
Domestically, the business group enjoyed steady growth, particularly through white and colored chocolates for industrial use. Functional margarine that substitutes for dairy products, cutting down the cost of fillings, and launch of new products offset the struggling sales of unique new products such as reduced-calorie creams and roll-in margarine, and both net sales and profit improved compared to the previous year. Despite highly volatile overseas dairy product costs, imported confectionary and baking ingredients enjoyed an increase in both net sales and profits through steady sales expansion of butter-containing products.

Dessert products from our domestic group company experienced a decline in both net sales and income through the absence of a new hit product that could have compensated for existing products that are struggling, in addition to the high material prices.

Our group company in Indonesia recorded an increase in sales, but high raw material prices dampened profitability. Driven by new product developments and aggressive sales expansion, our group company in Singapore on the other hand achieved a sharp increase in both sales volume and profit and contributed to the group's excellent performance.

Through these efforts, this business group achieved a sales volume of 89,590 million yen (12.3% y-o-y increase) and an operating income of 5,484 million yen (12.0% y-o-y increase).

<Soy Protein Business>
Domestically, soy protein ingredients kept its figures of quantities sold and sales volume compared to the previous despite sluggish demand in the meat and fish markets thanks to growth in the frozen food and meal preparation markets. Profitability, however, declined compared to the previous year due to intensified competition and soaring prices of raw materials. Overseas, our group company in China in this division continued to struggle in profitability due to intensified competition in the Chinese market and the increase in soy price.

The stable co-op targeted products covered for the industrial-use targeted products for soy protein products, and contributed for the growth in sales volume compared to the previous year. However, high raw material prices and the scandals regarding Chinese food products caused profitability to decline, despite cost-reducing efforts.

Although the fermentation and culture medium markets for soy peptides were doing as well as during the previous year, both volume and net sales staggered due to struggling sales in other markets. Our group company in China dealing with products in this division improved in profitability but it was not sufficient to overturn the sales to positive.

Water-soluble soy polysaccharides achieved an increase in both net sales and profit due to the recovery in sales of acid lactic beverages, among others.

Despite the launch of a new high-functionality product, soy milk saw a year-on-year decline in both net sales and profits owing to a shrinking market, intensified competition, and high raw material prices.

Mail order sales of soybean-related products experienced a decline in both net sales and profitability due to the declining health supplements market.

Through these efforts, this business group achieved a sales volume of 38,002 million yen (a decrease of 0.4% y-o-y) and recorded an operating loss of 1,914 million yen (an operating loss of 1,294 million yen was recorded in the previous year).

Amid these conditions, we recorded an extraordinary loss of 5,073 million yen based on impairment accounting of fixed assets, which were related to our/group company's soy milk production equipment and soy protein ingredient production equipment.

Predictions for the Next Business Term

The economical outlook is thought to become more uncertain due to cost pressures such as high oil prices and the concern of a staggering world economy from the U.S. subprime loan crisis, among other matters.

The business environment for our company is also expected to remain challenging as the prices of our main materials reach record levels and competition intensifies.

Amid such harsh environment, our group will actively make efforts to reach the goals stated in the new mid-term management plan "Innovation/Action 2010".

The oils and fats processing business will focus on sales expansion through strengthening productivity from the launch of new production equipment in our Singapore group company, and will continue promoting the sales of hard butters for chocolate, which are particularly high in demand overseas. In the Japanese market, we will introduce measures to enhance our palm oil business.

The confectionery and baking ingredients business will endeavor to expand its business through introducing new products with functionality that represents our customer's point-of-view, as well as increasing production of white and colored chocolates.

The soy protein business will introduce new high-functionality/quality products and continue the narrowing and cost reduction of development, production, and sales through consolidation of soy varieties, in an effort to improve performance.

We forecast a sales volume of 237,200 million yen (10.8% y-o-y increase), an operating income of 8,000 million yen (4.5% y-o-y increase), an ordinary income of 6,800 million yen (1.9% y-o-y decrease) and a net income for the term of 3,600 million yen (a net loss of 841 million yen was recorded this 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) (%)
First 2 Quarters 112,300 14.4 3,000 31.8 2,500 25.9 1,400 31.7
Full Year 237,200 10.8 8,000 4.5 6,800 (1.9) 3,600 -

End of report

(Note) 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.