Announcement of the Settlement of Accounts for the Third Quarter of the Year Ending March 2013

(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 2013 was announced on the afternoon of Thursday, February 7 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 2013 (April 1, 2012 to December 31, 2012)

Overview of the first three quarters for FY ending March 2013

The Japanese economy during the company’s third quarter period showed modest signs of recovery in overall economic trends and business earnings with yen depreciating and stock prices improving in the latter half of the period, but continued to be challenged with severe economic issues, including prolonged trends of deflation, decrease in trade surplus and stagnating employment. The economic trends remained opaque both within Japan and globally following the ongoing financial instability in Europe and slowing economic growth of China and other emerging markets.

The food industry in which our group is placed continued to face adverse business conditions challenged with thrifty consumer spending and lower pricing trends.

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 three quarters of the year ending March 2013, we achieved net sales of 175,133 million yen (3.1% y-o-y decrease), operating income of 11,088 million yen (7.1% y-o-y increase), ordinary income of 10,857 million yen (6.6% y-o-y increase) and net income of 6,595 million yen (0.6% y-o-y increase).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, lower pricing following the declining key raw material market prices of coconut oil and palm oil among other products led to decreased net sales for the division. We made efforts to maintain the profitability for coconut oil, palm oil and blended oil, but hard butters for chocolate experienced decreased profitability following the decline in cocoa butter market prices, and the segment overall posted lower sales and profit.

Overseas, hard butters for chocolate shrank in both sales and profits following decreased sales volume in the US, Europe and China together with staggering profitability comparable to Japan.

Through these results, this division achieved a sales volume of 67,809 million yen (decrease of 10.9% y-o-y decrease) and an operating income of 2,640 million yen (16.4% y-o-y decrease).

<Confectionery and Baking Ingredients Division>
Domestically, the sales of sweet chocolates increased but of ice-coating chocolates and ganache products decreased, resulting in lower sales for chocolates for industrial use overall. Creams achieved improved sales through Fuji Oil’s acquisition of Omu Milk Products Co., Ltd. as a consolidated subsidiary. Margarines and fillings posted increased sales led by improved sales of products for breads. Imported ingredients achieved increased sales volume for butter products but dropped in overall sales due to decrease in sales volume for milk powder and cocoa products. Both sales and profit posted gains overall for the division domestically.

Overseas, the division posted increase in both sales and profit year-on-year following strong sales of chocolates for industrial use, creams, margarines and shortenings in China and Southeastern Asia.

Through these results, this division achieved a sales volume of 79,066 million yen (3.1% y-o-y increase) and an operating income of 7,080 million yen (29.9% y-o-y increase).

<Soy Protein Division>
Soy protein ingredients increased sales for fishery, but decreased in health foods and fermentation and culture medium which led to decrease in sales overall.

Food function-enhancing ingredients dropped in products for export and rice but increased sales for fermentation and culture medium to post gains in sales overall.

Soy protein products sales improved as decrease in sales for products for instant noodles were offset by increase in catering foods and overseas sales.

Through these results, this division achieved a sales volume of 28,256 million yen (1.6% y-o-y increase) and an operating income of 1,366 million yen (decrease of 21.4% y-o-y).

Predictions for Consolidated Results for the Year Ending March 2013 (April 1, 2012 to March 31, 2013)

In reflection of our recent business trends, we made adjustments to the full year forecast announced on May 8th, 2012 as below.

*Qualitative information regarding forecast consolidated figures
The full-year forecast is expected to face adverse business conditions challenged with thrifty consumer spending and lower pricing trends.
Amid such circumstances, we have actively engaged in cost-cutting and pricing revisions, but both sales and profit are predicted to be lower than the previous term following lower profitability for hard butters for chocolate due to the decline in cocoa butter market prices, intensified competition with overseas products, and worsening profitability of soy protein products caused by rising costs of the ingredients.

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

End of report