The Nisshin OilliO Group, Ltd.

Second Quarter of FY2022

Financial Results Briefing

November 17, 2022

Summary of Financial Results for Second Quarter of FY2022

3

Actual Results

  • By focusing on sales price revisions in response to rising raw material costs in each segment, the company was able to achieve an increase in net sales.
  • In addition to steady implementation of sales price revisions and improved profitability due to increased sales of value-added products and other factors, there was also an impact from mark-to-market valuation gains on palm oil transactions (+2.55 billion yen in this quarter, a 0.5- billion-yenyear-on-year increase), and as a result, operating profit increased.

(Million yen)

Second quarter of

Second quarter of

YoY

FY2022 results

FY2021 results

Change

Change (%)

Net sales

275,621

195,329

+80,291

+41.1%

Oil and Fat

233,714

160,022

+73,691

+46.1%

Oil and Meal

170,311

123,269

+47,041

+38.2%

Processed Oil and Fat

63,403

36,752

+26,550

+72.5%

Processed Food and Materials

30,366

25,739

+4,627

+18.0%

Fine Chemical

10,234

8,265

+1,968

+23.8%

Other/Adjustments

1,306

1,302

+4

+0.3%

Operating profit

9,436

6,284

+3,152

+50.2%

Oil and Fat

8,809

5,096

+3,713

+72.9%

Oil and Meal

4,188

2,607

+1,581

+60.6%

Processed Oil and Fat

4,621

2,489

+2,132

+85.7%

Processed Food and Materials

56

630

(573)

(91.0%)

Fine Chemical

848

787

+60

+7.7%

Other/Adjustments

(278)

(230)

(47)

―

Ordinary profit

9,895

7,171

+2,723

+38.0%

Profit attributable to owners of parent

7,784

5,298

+2,486

+46.9％

Percentage of overseas sales (%)

25.0%

20.0％

+5.0P

―

Factors Impacting Net Sales and Operating Profit (Year on Year)

Changes in net sales

Changes in operating profit

4

(Billion yen)

+4.65

+1.95

+0.00

+73.70

275.60

195.30

Breakdown of Oil and Fat

Oil and Meal

＋47.05

Processed Oil and Fat

＋26.65

Second

Processed Food

Fine

Other/

Second

Quarter

Oil and Fat

Quarter

and Materials

Chemical

Adjustments

FY2021

FY2022

Factors impacting net sales

  • Oil and Fat

・Revisions to sales prices due to an increase in raw material costs (↑) ・Increase in sales volume of household-use products (↑)

・Increase both in sales volume and sales prices of meal (↑)

・Foreign currency translation effects of overseas subsidiaries (↑)

  • Processed Food and Materials

・Increase in sales volume of chocolate products and foreign currency translation effects of subsidiaries(↑)

・Revisions to sales prices of MCT products (↑)

・Revisions to sales prices of soybean material/food product (↑)

  • Fine Chemical

・Revisions to sales prices due to an increase in raw material costs (↑) ・Increase in sales volume of alcohol preparations (↑)

+3.70

+0.05

9.40

(0.55)

(0.05)

6.25

Breakdown of Oil and Fat

Oil and Meal

+1.60

Processed Oil and Fat

+2.10

Second

Processed Food

Fine

Other/

Second

Quarter

Oil and Fat

and Materials

Chemical

Adjustments

Quarter

FY2021

FY2022

Factors impacting operating profit

  • Oil and Fat

・Increase in raw material costs for oil and meal, processed oil and fat (↓) ・Revisions to sales prices due to an increase in raw material costs (↑)

・Increase in earnings on mark-to-market valuation of palm oil transactions (↑) ・Foreign currency translation effects of overseas subsidiaries (↑)

  • Processed Food and Materials

・Increase in cost rate for chocolate products and decrease in sales volume of premixed products (↓)

・Increase in selling, general and administrative expenses for seasonings such as salad dressings (↓)

・Increase in raw material costs and increase in selling, general and administrative expenses for MCT products (↓)

  • Fine Chemical

・Revisions to sales prices and higher sales volumes generated by European subsidiaries (↑) ・Increase in raw material costs and depreciation costs incurred with the start of operations at new plant (↓)

・Increase in raw material costs for hygiene-related products (↓)

5

Earnings Forecast for FY2022: Main Points of the Forecast for the Second Half

Market environment

Japan

  • As a result of rising prices for general goods and services used in day-to-day life due to the rapid depreciation of the yen, persistent high prices for raw materials and energy, and higher logistics costs, there are concerns regarding a slump in consumer sentiment.
  • Although a recovery in consumption activities is expected as a result of inbound demand and other factors, the situation remains uncertain including concerns about the possibility of an eighth wave of COVID-19.

Overseas

  • In addition to the risk of economic downturn precipitated by rapid monetary tightening policies intended to curtail inflation in countries around the world, heightened geopolitical risks must also be kept in mind.

Cost environment

  • Raw material prices are moving toward record highs due to a sense of tight supply and demand for grains and vegetable oils globally and protracted disruption of supply chains (supply networks) caused by the Russian invasion of Ukraine. In addition, raw material procurement costs remain at high levels as a result of the rapid depreciation of the yen.
  • The cost environment remains adverse because of persistent high raw material procurement costs as well as escalating utility costs and logistics expenses due to rising energy prices and other factors.

Sales price revisions

  • While market and cost environments in Japan remain adverse, the company is focusing on establishing appropriate sales prices and is making steady progress on creating new markets, reinforcing solution proposals, and expanding sales of value-added products.
  • Overseas, the company is focusing its efforts on sales of value-added products such as oils and fats used in chocolate products and raw materials for cosmetics and on expanding sales with new trading partners.

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Nisshin Oillio Group Ltd. published this content on 25 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 November 2022 07:43:09 UTC.