By and  on October 26, 2007

TOKYO — First-half profits at Shiseido Co. Ltd. jumped 37.9 percent year-on-year to 12.9 billion yen, or $108.2 million at average exchange, on sales that increased 4.5 percent to 362.87 billion yen, or $3.04 billion.

Results were driven by a 19.2 percent increase in Shiseido's international business, which was attributed to strength in the Chinese market and the effects of a weaker yen. Overseas operations accounted for 35 percent of revenues during the half ended Sept. 30. In the domestic market, sales slid by 1.7 percent.

Operating income increased 24.2 percent to 32.1 billion yen, or $269.3 million, as a result of sales growth overseas, an improved cost-of-sales ratio and a shift of some expenses to the second half. Domestically, operating income rose 19.6 percent.

Extraordinary income of 3.4 billion yen, or $28.5 million, came on the sale of shares in Shiseido Logistics Company Ltd. and the firm recorded extraordinary losses of 3 billion yen, or $25.2 million, as it posted an impairment loss and restructuring expenses.

In China, Urara, a one-year-old brand designed for chain stores, performed well, Shiseido noted. "In the Chinese department store channel, we continued strengthening Aupres, as well as Supreme Aupres, an upper prestige line launched [last] November," the group added. Outside of China, Shiseido focused on reinforcing and promoting its mainstay brands, "while actively advancing our activities in the travel retail business, centering on airport duty free shops."

Professional division sales to salons also increased, driven by U.S.-based Zotos International Inc., which enjoyed healthy demand for its Joico hair care brand.

Shiseido anticipates second-half increases in sales, profits and operating income. For the full year, Shiseido forecasts a 5.1 percent increase in sales, to 730 billion yen, or $6.41 billion at current exchange; a 20 percent rise in operating income, to 60 billion yen, or $526.3 million, and a 34 percent gain in net income, to 34 billion yen, or $298.2 million.

In other news, Shiseido has gone solar at its U.S. manufacturing plant, which is located in East Windsor, N.J.

The company, which installed a 69,000-square-foot array of solar energy panels atop the production facility in the spring, christened the $4.3 million system Tuesday with a noon ceremony attended by state and local officials, media and its own top executives.

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