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House Foods profit likely rose 15% as China devours curry roux

TOKYO -- House Foods Group's operating profit for the year ended in March likely rose 15% to some 10 billion yen ($91.5 million), helped by strong sales of high-margin curry roux blocks in China.

     The Japanese company projected a 12% profit increase to 9.7 billion yen. Sales likely shrank 1% to some 230 billion yen, falling short of the planned 7% increase to 246.7 billion yen. Japanese sales of ready-made curry packaged in retort pouches decreased amid intense competition. But even with the revenue drop, the company absorbed the rising cost of spices used to make curry roux by raising product prices.

     Operating profit from overseas businesses apparently soared about 50% to just over 1.6 billion yen. In China, the Vermont Curry roux blocks enjoyed sales growth while restaurant openings by curry eatery operator Ichibanya, which became a House Foods subsidiary in December, also boosted earnings.

     Health food series Ukon no Chikara, which contains turmeric and is said to prevent hangovers, rebounded on the year in the January-March quarter after languishing amid intense competition. The high-efficacy "liver plus" version proved popular.

     House Foods' operating profit is likely to shrink for the current fiscal year through March 2017 on financial burdens such as increased marketing spending in China and Ichibanya's goodwill amortization.

(Nikkei)

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