Morinaga Milk Industry Co (2264) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 increased 0.6% year-over-year to ¥140.6 billion, driven by price revisions and high-value product expansion, despite ongoing cost pressures.

• Operating profit declined 11.7% year-over-year to ¥8.5 billion, mainly due to higher raw material, logistics, and personnel costs, with domestic growth offset by overseas declines.

• Profit attributable to owners of parent dropped 90.0% year-over-year to ¥5.3 billion, reflecting the absence of last year's extraordinary gain from asset sales.

• The company continues to execute its Medium-term Business Plan 2022-2024, focusing on health-oriented products, cost management, and global expansion.

Financial highlights

• Q1 net sales: ¥140.6 billion (+0.6% YoY); operating profit: ¥8.5 billion (–11.7% YoY); ordinary profit: ¥9.6 billion (–8.4% YoY); profit attributable to owners: ¥5.3 billion (–90.0% YoY).

• Operating profit margin decreased to 6.0% from 6.9% year-over-year.

• Basic earnings per share for Q1: ¥61.54 (post-stock split basis).

• Comprehensive income for Q1: ¥8,794 million (–83.2% YoY).

• Ordinary profit for FY2025 forecast: ¥30.3 billion (+7.8% YoY).

Outlook and guidance

• FY2025 full-year forecast: net sales ¥570.0 billion (+4.2% YoY), operating profit ¥30.0 billion (+7.8% YoY), ordinary profit ¥30.3 billion (+7.8% YoY), profit attributable to owners ¥19.0 billion (–69.0% YoY).

• No changes to previously announced earnings forecasts.

• Domestic profit growth expected to offset higher raw material and logistics costs through price revisions and product mix improvements.

• Additional price revisions planned for ice cream (September) and cheese (October), with increases ranging from 6.3% to 15.2%.

• Dividend forecast for FY2025: ¥90 per share, up ¥30 year-over-year, with interim dividend system introduced.