News Release

2011.2.3Announcement of the Settlement of Accounts for the Third 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 third quarter of the year ending March 2011 was announced on the afternoon of Thursday, February 3 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Consolidated Results for the Third Quarter of the Year Ending March 2011 (April 1, 2010 to December 31, 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) (%)
Third quarter of the
year ending March 2011
167,056 3.8 13,595 (6.8) 13,278 (5.6) 8,652 (5.3)
Third quarter of the
year ending March 2010
161,013 (12.5) 14,586 60.7 14,067 67.4 9,141 68.2

Overview of the first three quarters for FY ending March 2011

Although the Japanese economy has shown slight recovery in capital investments and corporate earnings from the latter half of the third quarter, weak domestic consumption from the prolonged deflation and decreased export profitability caused by the stronger yen since the summer, among other factors, continued to afflict the economy.

The food industry in which our group is placed continued to be challenged with thrifty consumer spending and lower pricing trends, and supply concerns triggered by the unfavorable weather along with growing demand from developing countries which boosted global pricing of raw materials to further worsen business conditions.

Amid such environment, we continued on with 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 third quarter of the year ending March 2011, we achieved net sales of 167,056 million yen (3.8% y-o-y increase), operating income of 13,595 million yen (decrease of 6.8% y-o-y), ordinary income of 13,278 million yen (decrease of 5.6% y-o-y) and net income of 8,652 million yen (decrease of 5.3% y-o-y).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Hard butters for chocolate and industrial use continued to struggle in the domestic market. Higher raw material prices worsened profitability and lead to declines in earnings.

In our overseas subsidiaries, although hard butters for chocolate enjoyed robust increases in sales volume for the US and Asian markets, profits were negatively impacted by lowered retail pricing and increased raw material costs from the latter half of the quarter. Although milk powder for infants continued to see steady results in Asia and specialty products improved in the US and Europe to post gains in sales, profits decreased in the overseas market overall.

Through these results, this division achieved sales of 65,682 million yen (5.3% y-o-y increase) and a segment operating income of 5,395 million yen (decrease of 15.8% y-o-y).

<Confectionery and Baking Ingredients Division>
Domestically, colored chocolates achieved good results to garner improved sales year-on-year overall for industrial-use chocolates. Although margarines expanded sales, sales for creams decreased compared to the previous year. Imported confectionery and baking ingredients improved on its sales of milk powder and cocoa products to achieve higher sales. The division saw increase in sales but soaring material costs led to lower profits in the overall domestic market.

Overseas, steady growth of sales in Southeast Asia led to improved sales for chocolates for industrial use, creams, margarines and shortenings year-on-year.

Through these results, this division achieved sales of 72,789 million yen (4.7% increase y-o-y) and a segment operating income of 6,764 million yen (decrease of 0.6% y-o-y).

<Soy Protein Division>
In the domestic market, soy protein ingredients for fermentation and culture medium and for frozen foods generated steady business results. The agreement for joint venture company (Fuji Protein Technologies, Inc.) between Fuji Oil and Solae, LLC of the US was terminated in July 2010. Following this, imported sales from Solae had stopped, thereby narrowing the product mix for fishery and health foods to decrease overall year-on-year sales for soy protein ingredients. Overseas, the Chinese meats and health foods market continued to record excellent results, with sales exceeding the previous year.

Although sales for the industrial market performed well, the overall sales of the soy protein products remained flat compared to the previous year.

Water-soluble soy polysaccharides improved overall sales as a result of solid sales from beverages.

In soy milk and mail orders, the overall sales remained flat year-on-year despite improved sales for soy milk alone.

Through these results, this division achieved sales of 28,583 million yen (decrease of 1.8% y-o-y) and a segment operating income of 1,435 million yen (4.5% 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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