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Nikkei earnings preview: Kikkoman set to log record profit for April-September
TOKYO — Soy source maker Kikkoman is expected to record a group operating profit of around 16 billion yen ($132 million) for the six months ending in September, a roughly 30% jump from a year ago and a record for the first half.
The figure beats forecasts by about 2 billion yen, and earnings for the full fiscal year may also exceed expectations. Strong business in the U.S. drove the profit growth, with the weak yen also contributing.
Sales climbed over 10% to top 200 billion yen, beating the 199 billion yen projected. The company likely saw both profit and sales grow in the Japanese, U.S. and European markets.
In the U.S., the Japanese food boom has helped drive the company’s rice and sake wholesale businesses. The yen was weaker than the initially assumed 115 yen to the dollar, lifting yen-denominated profit.
Soy sauce sales are rising steadily in Germany and France, and widening sales channels in Italy and other southern European countries are also paying off.
Sales are recovering in Japan since the effects of the April 2014 consumption tax hike have worn off. Consumers returned to the company’s nama-shoyu, or unpasteurized soy sauce, which is bottled in airtight containers that maintain freshness, and other products. Nama-shoyu are profitable since they are pricier than regular soy sauce. Health-conscious consumers have continued to purchase more soymilk-based drinks.
Although sales of Uchi-no-Gohan seasoning mixes stalled in the April-June quarter, they have trended upward for July-September. Some seasonal products like noodle soups did poorly due to bad weather in the latter half of summer, but sales of mainstay products made up for the shortfall.
Cheap oil helped Kikkoman keep down energy costs, with the savings lifting profit. The company is set to announce April-September earnings Nov. 5.
(Nikkei)
Nikkei earnings preview: Kikkoman set to log record profit for April-September
