Japanese dairy and confectionery group Morinaga Milk Industry has booked a 32% fall in half-year profits as it battled higher raw material costs and upped spending on advertising and promotions to boost sales.
The company posted net income of JPY3.28bn (US$28.3m) for the six months to 30 September, down 31.7% on a year earlier.
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The fall in Morinaga’s operating income was steeper, dropping 46.5% to JPY5.15bn.
Morinaga pointed to the impact of rising raw material prices. However, with Japanese consumers watching their spending, the company invested in marketing to try to drive sales.
Morinaga said its net sales slid 1.6% to JPY315.76bn as what it described as “consumers’ tendency of conservative spending” strengthened.
The company’s cheese and milk sales rose but it saw a decline in the sales of yoghurt, milk-based drinks and ice cream.
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By GlobalData
