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Kao 9-Month Net Jumps on Tax Benefit

Profit rose 20.5 percent while sales edged up 0.4 percent.

TOKYO — Kao Corporation said Tuesday that its net income for the nine months ending Dec. 31 jumped at a double-digit pace on deferred tax benefits.
 
The personal care and beauty company is in the process of shifting its fiscal year to end in December rather than in March. So this nine-month period under review, running from April to December, serves as the company’s fiscal 2012 year. Percentages changes are calculated using the same nine-month period a year earlier.
 
Kao said net profit for the nine-month period rose 20.5 percent to 62.39 billion yen, or $720.6 million at an exchange rate provided by the company. Kao said tax benefits linked to the calendar year switch boosted its bottom line.

 
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Operating income grew 3.2 percent to 101.57 billion yen, or $1.17 billion. The group attributed this to increased sales and lower prices for raw materials, and cost reduction activities undertaken by the company.
 
Kao said that net sales for the period edged up 0.4 percent to 1.01 trillion yen, or $11.70 billion.
 
Kao’s beauty care segment, which includes such brands as Kanebo, Molton Brown, Bioré and Jergens, saw sales remain flat at 444.4 billion yen, or $5.13 billion.
 
“In premium skin care products, sales in Japan increased, reflecting the steady performance of Bioré facial cleanser, Bioré U body cleanser and Curél derma care products,” the company said in a release. “In Asia, Bioré performed strongly with the effect of product improvements. In the Americas, sales of Jergens hand and body lotions increased.”
 
When broken down by geographical regions, Kao’s consumer products business — which encompasses both beauty products and other more general items such as diapers and laundry detergent — saw sales growth in all areas except Europe, where sales decreased 6.9 percent to 57.3 billion yen, or $667.55 million.
 
“Sales were firm within Europe amid severe economic conditions, but performance was impacted by lower export sales and the effect of currency translation due to the appreciation of the yen,” the company said.
 
Kao also released its guidance for the current fiscal year, ending December 31. It expects net income to grow 16.4 percent to 73 billion yen, or $843.2 million. It forecasts operating income will grow 3.8 percent to 116 billion yen, or $1.34 billion. The company is predicting sales will rise 4.1 percent to 1.27 trillion yen, or $14.67 billion.