News Release

2011.8.5Announcement of the Settlement of Accounts for the First Quarter of the Year Ending March 2012

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

Our settlement of accounts for the first quarter of the year ending March 2012 was announced on the afternoon of Friday, August 5 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Consolidated Results for the First Quarter of the Year Ending March 2012 (April 1, 2011 to June 30, 2011)

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) (%)
First quarter of the
year ending March 2012
59,169 10.6 3,911 (13.5) 3,842 (15.9) 2,671 (10.9)
First quarter of the
year ending March 2011
53,510 7.2 4,520 26.8 4,570 35.9 2,997 39.2

Overview of the first quarter for FY ending March 2012

The Japanese economy is suffering from increasing concerns toward future economic activities as it struggles amid the power shortages and issues arising from radioactive material contamination in the aftermath of the nuclear disaster, in addition to direct damages caused by the March 11 earthquake. With trends of deflation and the appreciation of yen showing signs of prolongation together with stagnating employment conditions, the economy is expected to continue facing challenging circumstances.

The food industry in which our group is placed continued to be challenged with thrifty consumer spending and lower pricing trends, and with key raw material and fuel oil prices soaring, faced adverse business conditions.

Amid such environment, we carried out measures from our new middle term business plan “Global & Quality 2013”, engaging in product development fitting the needs of customers, delivering high-functionality ingredients and reducing production costs upon positioning “promotion of global management”, “promotion of technological management” and “promotion of sustainable management” as our fundamental policies.

As a result, for the first quarter of the year ending March 2012, we achieved net sales of 59,169 million yen (10.6% y-o-y increase), operating income of 3,911 million yen (decrease of 13.5% y-o-y), ordinary income of 3,842 million yen (decrease of 15.9% y-o-y) and net income of 2,671 million yen (decrease of 10.9% y-o-y).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, higher raw material prices led to decreased profitability, but steady sales of coconut oil, palm oil, blended oil and hard butters for chocolate led to improved sales and profit.

In our overseas subsidiaries, hard butters for chocolate shrank in sales and profits following drops in retail prices after cocoa butter prices fell in the market together with decrease in sales volume in Asia and North America. Palm oil recorded improved sales year-on-year due to the rise in raw material prices, and posted gains in sales but loss in profit overseas.

Through these results, this division achieved a sales volume of 25,763 million yen (24.3% y-o-y increase) and an operating income of 1,386 million yen (decrease of 18.5% y-o-y).

<Confectionery and Baking Ingredients Division>
Domestically, chocolates for industrial use including sweet chocolates and colored chocolates experienced decrease in sales and profits following decline in demand for sweets and breads in retail distribution. Margarines, shortenings and fillings increased sales year-on-year due to the demand in products for breads, but fell in profits following higher raw material prices. Imported confectionery and baking ingredients improved on its sales of milk powder products to post gains in sales, leaving the division to record increase in sales and decline in profit overall.

Our subsidiary overseas marked an increase in sales year-on-year due to excellent results in chocolates for industrial use, margarines and shortenings in the Southeast Asian market, but rising raw material prices worsened profitability to mark a fall in profit.

Through these results, this division achieved a sales volume of 23,897 million yen (3.3% increase y-o-y) and an operating income of 1,814 million yen (decrease of 22.3% y-o-y).

<Soy Protein Division>
In soy protein ingredients, sales for fishery and health foods usage decreased following the termination of joint venture agreement with Solae, LLC of the US, but frozen foods, fermentation and culture medium, and prepared foods posted good sales to leave the division overall with decrease in sales but gains in profit.

Sales for soy protein food function-enhancing ingredients were flat compared to the figures recorded the previous year.

Soy protein food products grew in sales year-on-year after products for instant noodles and catering foods market improved.

Soy milk improved sales year-on-year turning the profit to positive.

Through these results, this division achieved a sales volume of 9,507 million yen (decrease of 1.4% y-o-y) and an operating income of 710 million yen (46.1% y-o-y increase).

Predictions for Consolidated Results for the Year Ending March 2012 (April 1, 2011 to March 31, 2012)

(% 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) (%)
First 2 Quarters 114,700 6.6 6,600 (20.3) 6,300 (22.1) 4,100 (15.6) 47.70
Full Year 243,600 9.4 15,900 (4.2) 15,300 (5.8) 9,700 (0.8) 112.84

(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 9, 2011 of the second quarter as well as 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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