Snow Brand Milk reports loss
of around ¥13.5bn in the current fiscal year, worsening from the
¥9bn loss forecast earlier.
The Japanese dairy products company Snow Brand Milk Products Co. expects a consolidated operating loss of around ¥13.5bn (Euro125.6m) in the current fiscal year, worsening from the ¥9bn (Euro83.7m) loss forecast earlier, the Nihon Keizai Shimbun reported. The firm reported an operating loss of ¥56.1bn (Euro522m) for fiscal 2000. Retail prices for Snow Brand's mainline dairy products have been falling in the wake of last year's food-poisoning incident, and prices on a wide-range of goods, including frozen foods and desserts, have continued to drop due to deflationary pressures. Group sales are expected to reach ¥1.21 trillion (Euro11.25bn), reaching previous projections. Sales of dairy products in the first fiscal half are sluggish due to lower-than-average temperatures last month and early this month, as well as news of the first suspected case of mad cow disease in Japan. But growing sales at its food-wholesaling unit and other subsidiaries are expected to make up for declining sales at the parent. About 1,040 employees will participate in an early-retirement program at the end of this month, so the firm will record ¥10bn in expenses used to sweeten retirement packages as an extraordinary loss. It will also book a ¥5bn (Euro46.52m) loss incurred from closing nine plants this fiscal year. To offset extraordinary losses, Snow Brand said Friday that it will sell 35 per cent of the outstanding shares in subsidiary Yukijirushi Access Inc. to Itochu Corp. and five other firms at the end of this month. Proceeds from the sale are expected to total ¥13.7bn (Euro127.4m), with ¥12.7bn (Euro118.16m) to be booked as extraordinary profits for the first fiscal half. The company also plans to earn about ¥2.3bn (Euro21.4m) in profits on the sale of stock and real estate holdings in the second fiscal half. Earnings will also be hurt from the ¥7bn (Euro65.12m) in loans that two subsidiaries extended to the failed Mycal Corp. Snow Brand's group net loss is now forecast at about ¥16.5bn (Euro153.5m), widening from the ¥12bn (Euro111.6m) projected earlier.