Ajinomoto H1 FY24 business profit jumps 13.5% on rising seasoning demand; upgrades profit forecast by 2 bil

 

1. Qualitative Information on the First Half Consolidated Results
Upon the adoption of IFRS (International Financial Reportng Standards), the Ajinomoto Group has introduced "business profit” as a new profit level that will better enable investors, the Board of Directors, and the Management Committee to grasp the core business results and future outlook of each business while also facilitating continual evaluation of the Group’s business portfolio by the Board of Directors and the Management Committee. “Business profit” is defined as sales and share of profit of associates and joint ventures minus cost of sales, selling expenses, research and development expenses, and general and administrative expenses. Business profit does not include other operating income or other operating expenses.

In addition, in the first half ended September 30, 2024, the Company finalized the provisional accounting treatment for a business combination and a significant revision to the initial allocation of acquisition costs has been made and reflected in the fiscal year ended March 31, 2024.

(1) Overview of Operating Results
In the first half ended September 30, 2024, the Company’s consolidated sales increased 8.2% year on year, or ¥56.2 billion, to ¥744.2 billion. This was due to increases in sales in the Seasonings and Foods segment, the Frozen Foods segment, and the Healthcare and Others segment, including the effect of currency translation. Business profit increased 13.5% year on year, or ¥10.3 billion, to ¥86.9 billion primarily due to the increases in sales in the Seasonings and Foods segment and the Healthcare and Others segment and other factors.

Profit attributable to owners of the parent company totaled ¥50.2 billion, up 8.1% year on year, or ¥3.7 billion, primarily as a result of higher business profit.

Furthermore, the Company has revised the full-year consolidated performance forecast for the fiscal year ending March 31, 2025 announced on May 9, 2024 in light of recent trends in business performance and other factors.

As a result of reviewing the impact of foreign exchange fluctuations, the state of the economy, the sales situation, and other factors under the current business environment, the Company has upwardly revised the forecast for sales in the Healthcare and Others segment by ¥5.5 billion from the previous forecast, reflecting strong sales of Functional Materials (electronic materials and others), and the overall forecast for sales to ¥1,532.5 billion. The progress rate of sales against the revised forecast is 48.6%. As a result of reviewing the current business environment, including the impact of foreign exchange fluctuations and economic conditions, the sales situation, and the status of company-wide initiatives, the forecast for business profit in the Seasonings and Foods segment has been revised downward by ¥2.9 billion from the previous forecast, mainly to reflect the impact of higher coffee bean prices, and the forecast for business profit in the Healthcare and Others segment has been revised upward by ¥5.2 billion from the previous forecast, mainly to reflect the effect of higher sales in the Functional Materials (electronic materials and others) segment.

As a result, the Company has raised its total business profit forecast by ¥2.0 billion from the previous forecast to ¥160.0 billion. The progress rate of business profit against the revised forecast is 54.3%. The forecast for profit attributable to owners of the parent company is unchanged despite the upward revision of the forecast for business profit, mainly reflecting expenses associated with structural reforms. The progress rate of profit attributable to owners of the parent company against the full-year forecast is 52.9%. The forecast is based on an exchange rate of ¥149 to US$1 (for the second half, a rate of ¥145 to US$1).