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Japan-Update

Kikkoman seen posting record April-December profit

Soy sauce titan benefiting from lower soybean prices, strong sales

TOKYO -- Kikkoman is expected to report operating profit of about 28 billion yen ($249 million) for the nine months ended in December, up 3% on the year and an all-time high, on cheaper soybeans and brisk sales of soy sauce.

Overall sales were likely more or less flat at slightly above 310 billion yen. Although the yen's appreciation compared to a year earlier pushed down Kikkoman's overseas sales in yen terms, this was partially offset by stronger demand in Japan for unpasteurized soy sauce. And sales of high-priced soy milk products grew.

Overseas sales were robust, especially in North America, apparently rising around 6% in local currency terms. Sales of soy-sauce-based condiments such as teriyaki sauce climbed.

Lower soybean costs led to improved profitability, absorbing the negative effects of a strong yen in the first half of the fiscal year. With the yen weakening since November, Kikkoman's overseas business likely logged increased profit for the April-December period.

For the full year through March, Kikkoman projects a 3% slide in operating profit to 31.5 billion yen. But the condiment maker may upgrade the forecast since the yen is currently weaker than its assumed rate of 103.5 to the dollar, and the profitability of domestic operations is improving. April-December results are scheduled for release on Friday.

(Nikkei)

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