Ajinomoto blames income drop on lysine prices
the back of falling prices of lysine, an important amino acid-based
product.
In addition, net income for the Japan-based seasonings specialist was down 22 per cent from last year to 34.9 billion yen.
The company said that higher raw material prices were also a key factor in the significant year-on-year decrease in operating income.
However, net sales increased by 3 per cent for the fiscal year ended 31 March 2006 to 1,106.8 billion Yen. The Japanese firm continues to dominate the amino acid market, with more than 25 per cent of the market for lysine alone and 30 per cent of the monosodium glutamate market.
In the Domestic Food Products business, sales rose slightly compared with the previous fiscal year as a result of increased sales of various types of coffee, frozen foods and other products. Despite the effect of higher prices for certain raw ingredients, the company said that operating income rose year-on-year due to progress in cost reductions.
Ajinomotos lineup of Japanese, Western and Chinese soup stock products performed well despite a slight decline in sales of Hon-Dashi compared with the previous fiscal year, as a result of effective marketing activities for consomm and Chinese soup stocks.
The group said that sales of newly launched varieties of Knorr Cup Soup and Cook Do were solid.
In the Overseas Food Products business, sales and operating income both increased compared with the previous fiscal year due to the penetration of sales price increases for umami seasoning.
And in the Pharmaceuticals business, sales and operating income both increased compared with the previous fiscal year, due to the contribution to sales of drugs for lifestyle-related diseases and other factors, although LIVACT Granules and infusions faced difficult conditions.
For the fiscal year ending 31 March 2007, Ajinomoto forecasts consolidated net sales of 1,180 billion yen, operating income of 71.5 billion yen, ordinary income of 69 billion yen and net income of 35.5 billion yen.
These forecasts assume a U.S. dollar/yen exchange rate of 115 yen for the period.
