At its briefing on results for the first quarter of the fiscal year ending March 2027, Morinaga Milk Industry reported record quarterly consolidated operating profit of ¥10 billion. In Japan, however, weak sales volumes and rising costs weighed on profit, while the full-year forecast was revised upward and the overseas contribution to profit is expected to rise to approximately 60%.
Morinaga Milk Industry held its results briefing online, reporting consolidated revenue of ¥127.1 billion and operating profit of ¥10 billion for Q1, both on a quarterly basis, with operating profit reaching a record high. Operating profit increased by ¥1.1 billion year on year. The company emphasized that its overseas operations were the main driver of the profit increase.
Overseas operations lifted profit, led by ミライ社 in Germany, while Pakistan's ニュートリコモリナガ社 and TIF社 in the United States also grew steadily. The benefit of the weaker yen was an additional tailwind, and the company's bifidobacteria-related business also secured higher revenue. In Japan, weak sales volumes and rising costs weighed on profit, while price revisions and package-size changes for products including Bifidus and Mt. Rainier also had an impact.
The company raised its forecasts for cumulative results through the second quarter and for the full year. It plans to raise its overseas forecast and lower its domestic forecast, with full-year operating profit expected to be ¥2 billion above the previous forecast and cumulative operating profit through the second quarter expected to be ¥2.1 billion higher. The overseas contribution is expected to reach approximately 60%, while the assumed USD/EUR exchange rates have been changed to ¥160/¥185, respectively.
The company identified recovering domestic sales volumes as its top priority and plans to rebuild its earnings base through pricing strategies and structural reforms. The impact of cost increases stemming from the situation in the Middle East is expected to total ¥4 billion for the full year, comprising ¥3 billion in Japan and ¥1 billion overseas. The company also noted that further revisions could be made depending on future sales trends.