News Release

2010.11.5Announcement of the Settlement of Accounts for the Second Quarter of the Year Ending March 2011

(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 2011 was announced on the afternoon of Friday, November 5 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 2011
(April 1, 2010 to September 30, 2010)

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 2011
107,643 5.2 8,283 4.8 8,084 8.1 4,855 1.4
Second quarter of the
year ending March 2010
102,347 (11.9) 7,904 62.5 7,479 67.1 4,789 59.6

Overview of the first half for FY ending March 2011

The Japanese economy during the second quarter period saw some evidence of recovery following higher demands resulting from inventory cutbacks, but employment conditions remain to be severe, and negative factors, including decreased export profitability caused by the stronger yen starting from the latter half of the quarter, worsened the situation.

The food industry in which our group is placed continued to be challenged with thrifty consumer spending and lower pricing trends, and consumption was hit hard by the extremely hot weather during the summer.

Amid such environment, we achieved favorable results through carrying out measures from the medium-term business plan "Innovation and Action 2010", promoting "technological management", engaging in product development fitting the needs of customers, delivering high-functionality ingredients and reducing production costs. We also placed focus on "expansion of overseas businesses" and "reconstruction of soy protein businesses" positioned as key issues.

As a result, for the second quarter of the year ending March 2011, we achieved net sales of 107,643 million yen (5.2% y-o-y increase), operating income of 8,283 million yen (4.8% y-o-y increase), ordinary income of 8,084 million yen (8.1% y-o-y increase) and net income of 4,855 million yen (1.4% y-o-y increase) to record increases in both sales and profit.

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, although the heat wave caused hard butters for frozen desserts to sell significantly more, the overall sales remained almost flat as hard butters for chocolate and industrial use struggled. Higher raw material prices lead to declines in profit.

In our overseas subsidiaries, hard butters for chocolate enjoyed robust increases in the Asian, European and US markets, and specialty products on milk powder for infants continued to see steady results in Asia to post gains in sales and profit.

Through these results, this division achieved a sales volume of 42,242 million yen (6.5% y-o-y increase) and a segment operating income of 3,428 million yen (decrease of 0.1% y-o-y).

<Confectionery and Baking Ingredients Division>
Domestically, chocolates for industrial use continued to achieve steady results, with ice-coating chocolates and colored chocolates enjoying large increases in sales volume. Although the hot summer weather impacted creams, margarines, shortenings and fillings, the products recorded sales similar to the previous year. Imported confectionery and baking ingredients improved on its sales of milk powder products. Overall, the division saw increases in sales and profit within Japan.

Our subsidiary overseas posted improved sales, with chocolates for industrial use, creams, margarines and shortenings in southeastern Asia performing well.

Through these results, this division achieved a sales volume of 46,239 million yen (6.3% increase y-o-y) and a segment operating income of 3,996 million yen (10.6% y-o-y increase).

<Soy Protein Division>
Domestically, soy protein products posted favorable results from frozen foods and prepared foods markets but nonetheless dropped in sales due to a fall in health food products. For soy protein products, although instant noodles performed well, sales contracted as products for industrial use saw decline following the heat wave. For soy protein food function-enhancing ingredients, the hot weather stimulated markets for noodles and beverages to achieve gains in sales. Although soy milk and mail orders achieved strong sales from soy milk, it was not enough to offset losses.

Through these results, this division achieved a sales volume of 19,161 million yen (decrease of 0.3% y-o-y) and a segment operating income of 857 million yen (0.0% y-o-y increase).

Predictions for Consolidated Results for the Year Ending March 2011
(April 1, 2010 to March 31, 2011)

(% is in comparison to the previous year)

  Net sales Operating income Ordinary income Net income Net income
per share
(yen)
(millions of yen) (%) (millions of yen) (%) (millions of yen) (%) (millions of yen) (%)
Full Year 223,600 4.9 16,200 (9.8) 15,600 (10.2) 10,000 (6.8) 116.33

(Note) No revisions for forecast consolidated figures were made this quarter

*Qualitative information regarding forecast consolidated figures
No revisions have been made for the forecast announced on May 7, 2010 of the year. Revisions will promptly be announced if deemed necessary after determining the changes that may arise in the Company's business environment.

*Explanation and other notes regarding appropriate utilization of the predictions
The forecasts above have been made based on assumptions deemed rational together with 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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