TOKYO — Kao Corp. said Wednesday that it posted a double-digit growth in full-year net profit, thanks to cost reduction measures, a weak yen and increased demand for cosmetics products by international tourists.
The company’s net profit for the 12 months ended Dec. 31, 2015 grew 24.2 percent to 98.86 billion yen, or $820.55 million at average exchange rates for the period.
Operating income increased by 23.3 percent to 164.38 billion yen, or $1.36 billion.
Kao posted yearly net sales growth of five percent for a total of 1.47 trillion yen, or $12.22 billion.
“Profits increased due to the effect of increased sales, mainly in the human health-care business in Japan and the consumer products business in Asia, and lower prices of raw materials, mainly natural fats and oils and petrochemicals, among other factors,” the company said.
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This was the third and final year of Kao’s midterm plan that began in fiscal 2013 with “sustained profitable growth” as one of its pillars. As of the end of fiscal 2015, Kao said it achieved all the targets it set itself with the three-year plan.
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In its beauty-care business segment, which includes such brands as Kanebo, Bioré, Jergens, Molton Brown and John Frieda, full-year sales increased by 3 percent to 607.7 billion yen, or $5.04 billion. But its human health-care segment, which is responsible for products such as disposable diapers, sanitary pads and bath tablets, posted the largest sales growth. Those sales grew 16.9 percent to 280.7 billion yen, or $2.33 billion.
“The Kao Group made efforts that included responding to changing consumer lifestyles and social issues such as the environment, health, the aging society and hygiene, launching numerous high-value-added products and enhancing proposal-oriented sales activities,” Kao said. “Sales grew, mainly of sanitary products, although sales of cosmetics decreased compared with the previous fiscal year.”
Kao’s sales grew in each geographical region in which it operates, with the largest growth coming from Asia and the Americas. In non-Japan Asia, sales were up 15 percent on the year to 281.5 billion yen, or $2.34 billion. Sales in the Americas grew 11 percent to 137.8 billion yen, or $1.14 billion. But the company’s home market remains its largest, with sales in Japan expanding 2.2 percent to 1.02 trillion yen, or $28.84 billion.
Kao is predicting continued growth throughout its current fiscal year, ending Dec. 31. Its newly released guidance shows net income increasing by 14.2 percent to 120 billion yen, or $995.78 million at current exchange rates.
The company expects operating profit will expand by 9.7 percent year-on-year to 184 billion yen, or $1.53 billion.
It is predicting sales growth of 2.4 percent to 1.51 trillion yen, or $12.53 billion.