TOKYO — A $400 million bottom-line swing returned Shiseido Group to profitability in fiscal 2003.

The Tokyo-based group of 96 subsidiary companies recorded profits of $211.2 million in the year ended March 31, after posting a net loss of $196.3 million in the prior year. Dollar figures are converted from the yen at current exchange rates.

Sales increased 5.3 percent, to $5.4 billion, as consolidated income from operations nearly doubled, shooting up 91.6 percent to $422.4 million.

“Domestic sales rose 2.1 percent, thanks mainly to steady performances by the cosmetics and toiletries segments, which grew steadily following the completion of major distribution and inventory adjustments,” said the firm in a statement. Sales from cosmetics, which made up 77.6 percent of total revenues, increased 4.8 percent to $4.2 billion.Toiletries, 11.1 percent of sales, increased 8.2 percent to $596.7 million.

“Overseas sales grew 10.6 percent on a local currency basis. After converting to yen, this translates into a solid 16.5 percent jump,” said Shiseido. Overseas sales made up 24.8 percent of the total.

Shiseido reported an extraordinary loss of $80.5 million for the year from the decreased valuation of its assets due to depressed stock markets. However, this was a fraction of the prior year’s extraordinary losses of $493.1 million, attributable to devaluation of financial assets, amortization of inventories and restructuring expenses.

The figures for consolidated net sales, income from operations, ordinary income and net income all represented historical highs for the Shiseido Group. It also reached its return-on-equity target of 7 percent.

Shiseido achieved a 6.5 percent increase in overseas cosmetics sales in local currency terms, and a 12.6 percent gain on a yen-denominated basis due to the yen’s depreciation.

Overseas, “our results were affected by the slowdown in the U.S. and European economies and restrictions on the import of cosmetics into China,” said Shiseido. Bolstered by the depreciating yen, however, sales in each region reported double-digit growth. On the expense side, Shiseido commented it continued actively spending to expand business, but such expenditures were easily covered by increased revenues. Income from operations in the Americas returned to profitability while income in Europe and Asia/Oceania grew solidly.The Americas accounted for 7.5 percent of sales and grew 12.2 percent when translated into yen. Europe generated 9.9 percent of revenues and increased 20.2 percent in the yen. Sales in Asia/Oceania except Japan, 7.4 percent, also rose 16.4 percent compared with a year earlier.

For the current year, the group projects $215.5 million in net profits and $5.5 billion in net sales.

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