Kikkoman reported growing overseas profits

Kikkoman reported growing overseas profits

Kikkoman, the Japan-based soy sauce and seasoning group, has lifted its forecast for annual sales after reporting a 6% increase in half-year revenues.

However, the company booked mixed profit numbers for the first half of its financial year, with net income up 8.8% at JPY7.79bn (US$67.8m) - but operating income falling 2.9% to JPY12.3bn.

Kikkoman expects its annual net sales to reach JPY363bn for the year to the end of March, an increase of 5.8% on the previous year. In August, when Kikkoman published its results for its first quarter, it forecast full-year net sales of JPY361bn.

The company's increase in net sales for the six months to the end of September led to a growth in the cost of sales and an increase in SG&A expenses, putting pressure on operating income.

Items including a gain on the valuation of derivatives and cycling one-off costs helped net income.

Kikkoman saw operating income from its domestic foods business fall almost 40%. Sales in Japan dipped 0.2% as Kikkoman felt the effects of last-minute demand ahead of the consumption tax hike in Japan in April. In its commentary on the results, Kikkoman reported moves including NPD, TV advertising and promotional activities on certain products.

However, sales and operating income from Kikkoman's businesses overseas grew, with the company reporting higher sales in Europe, Thailand - its "key" market in Asia and Oceania - and in China, where it was boosted by a new sales company set up in April.

Click here for an interview published this week with Kikkoman president and CEO Noriaki Horikiri in which he discussed how the company was using innovation to try to drive sales in Japan - and looking to further expand overseas.