Ajinomoto: financial results for fiscal 2016

Tokyo / JP. (aci) Ajinomoto Company Incorporated announced an overview of its consolidated financial results for the fiscal year ended March 31, 2017. Summary:

(JPY billions unless otherwise noted; figures rounded down) Net Sales Operating Income Ordinary Income Profit Attributable to Owners of Parent
Fiscal Year Ended March 31, 2017 1’091.4 85.3 90.2 52.5
Fiscal Year Ended March 31, 2016 1’184.1 90.8 94.1 63.4
Y-o-Y Change -7.8% -6.1% -4.1% -17.1%

.
Net sales for the fiscal year ended March 31, 2017 decreased JPY 92.6 billion compared with the previous fiscal year to JPY 1’091.4 billion as a result of factors including the negative effect of currency translation and the change of EA Pharma Co., Ltd. from a consolidated subsidiary of Ajinomoto Co. to an affiliated company accounted for by the equity method due to the restructuring of the pharmaceuticals business. Operating income decreased JPY 5.5 billion to JPY 85.3 billion and ordinary income decreased JPY 3.8 billion to JPY 90.2 billion due to a substantial decline in income from animal nutrition and the negative effect of currency translation, among other factors. Profit attributable to owners of parent decreased JPY 10.8 billion to JPY 52.5 billion in the absence of factors including a gain on sales of shares of an affiliated company in connection with the sale of equity in NISSIN-AJINOMOTO ALIMENTOS LTDA., which was recorded in the previous fiscal year.

Dividends for the fiscal year ended March 31, 2017 are scheduled to be JPY 30 per share (including an interim dividend of JPY 15 per share), an increase of JPY 2 per share from the previous fiscal year, and dividends for the fiscal year ending March 31, 2018 are scheduled to be JPY 30 per share (including an interim dividend of JPY 15 per share).

An overview of consolidated results by business segment is as follows

Ajinomoto Co. has changed the classification of its reportable segments as of the fiscal year ended March 31, 2017. Figures below for the previous fiscal year have been reclassified to match the current segments.

(JPY billions unless otherwise noted; figures rounded down) Net Sales Y-o-Y Change Y-o-Y Change (%) Operating Income Y-o-Y Change Y-o-Y Change (%)
Japan Food Products 390.4 -6.6 -1.7% 38.2 +7.6 +24.9%
International Food Products 428.9 -34.9 -7.5% 36.5 -5.4 -13.0%
Life Support 124.0 -18.3 -12.9% 5.6 -6.1 -52.1%
Healthcare 89.5 -0.0 -0.1% 6.5 +0.9 +16.4%
Other Business 58.3 -32.7 -35.9% -1.6 -2.4
Total 1’091.4 -92.6 -7.8% 85.3 -5.5 -6.1%

Note: Domestic and overseas sales of ACTIVA® products to food processing companies and savory seasonings are included in Japan Food Products. Domestic and overseas sales of AJI-NO-MOTO® for the food processing industry and nucleotides and sweeteners are included in International Food Products.

Japan Food Products segment sales decreased, despite growth in sales of frozen foods (Japan), as sales of seasonings and processed foods (Japan) declined due to factors including the impact of the sale of a subsidiary and a decrease in sales of coffee products. Operating income increased due to increases in income from frozen foods (Japan) and seasonings and processed foods (Japan).

International Food Products segment sales decreased as sales of seasonings and processed foods (International), umami seasonings for processed food manufacturers and sweeteners, and frozen foods (International) declined on a yen basis, due in part to the negative effect of currency translation. Operating income decreased due to factors including the negative effect of currency translation.

Life Support segment sales decreased because animal nutrition sales declined substantially. Operating income decreased due to factors including a substantial decline in income from animal nutrition.

Healthcare segment sales were on par with the previous fiscal year overall, as sales of pharmaceutical custom manufacturing and amino acids for pharmaceuticals and foods decreased, but sales of other businesses (health foods, etc.) increased. Operating income increased due to an increase in income from pharmaceutical custom manufacturing as well as results for amino acids for pharmaceuticals and foods on par with the previous fiscal year.

Consolidated Performance Forecast for the Fiscal Year Ending March 31, 2018

Ajinomoto Co. has decided to voluntarily adopt International Financial Reporting Standards (IFRS) as of the consolidated financial statements in its securities report for the fiscal year ended March 31, 2017. As a result, the forecast for the fiscal year ending March 31, 2018 is presented based on IFRS.

(JPY billions unless otherwise noted; figures rounded down) Sales Business Profit Profit Attributable to Owners of the Parent
Fiscal Year Ending March 31, 2018 1’187.0 102.0 57.0

Note: With the adoption of IFRS, the Ajinomoto Group will introduce the income line item «business profit» so that its investors, Board of Directors and Management Committee can understand the core business results and future outlook of each business and the Board of Directors and Management Committee can continuously evaluate the business structure. «Business profit» is an income line item that is calculated by subtracting «cost of sales,» «selling expenses,» «research and development expenses» and «general and administrative expenses» from «sales» and adding «equity in earnings of non-consolidated subsidiaries and affiliates,» and does not include «other operating income» and «other operating expenses.»

The assumed exchange rate for the fiscal year is JPY 108 to USD 1.

Note: The performance forecast above is based on information available to Ajinomoto Co. as of the date of this news release. Various factors could cause actual results to differ materially from the above forecast.

bakenet:eu