Kao Profits Rise 12.2%

Company sales for the year ended March 31 gained 2.5 percent.

TOKYO — Kao Corp. said today that its net profits for the 12 months ended March 31 grew 12.2 percent, bolstered by increased sales, cost reduction activities and curtailed expenses.


The increase came despite an extraordinary loss of 2 billion yen, or $25.34 million at average exchange rates for the period, related to last year’s earthquake.
Net income for the fiscal year totaled 52.43 billion yen, or $638 million at an exchange rate provided by the company. Operating income rose 3.8 percent to 108.59 billion yen, or $1.32 billion.
Kao reported sales growth of 2.5 percent, for a total of 1.22 trillion yen, or $14.8 billion.
In Kao’s beauty care sector, which includes brands such as Kanebo, Molton Brown, Bioré and Jergens, sales increased 0.8 percent compared with the previous year, totaling 537.9 billion yen, or $6.55 billion.
Despite a continuing contraction of the cosmetics market in Japan, the company said that sales of its premium cosmetics gained in its home market. In addition, premium hair care products performed well outside of Japan.
“Sales of prestige cosmetics, which consist of self-selection and counseling products, increased 2.2 percent to 259.9 billion yen [or $3.29 billion] with the launch of new products, although the downtrend continued in Japan’s cosmetics market with the impact of the earthquake, in addition to the shift in consumer preference toward lower-priced products,” the company said in a statement.
Geographically, Kao saw its biggest sales growth in Asia and Oceania, excluding Japan. Net sales in the region were up 13.9 percent year-on-year, coming in at 173.5 billion yen, or $2.11 billion.
The company also released its guidance for the current fiscal year. It expects net income to grow by 16.1 percent to 60 billion yen, or $730 million. Operating income is forecast to increase 1.6 percent to 100 billion yen, or $1.22 billion. Kao predicts net sales will be up 1.2 percent to 1.02 trillion yen, or $12.41 billion.