■Lacto Japan ＜3139＞ Performance Trends

(4) Asia Business (Dairy Ingredients Sales Division)

Since the inventory level of skimmed milk powder in Japan declined, export-related transactions for domestically produced skimmed milk powder, which had been expanded in the same period last year, price competition was intense in bidding for price appeal products for some local companies, and sales volume was 18,518 tons, down 12.2% from the same period last year. Sales of dairy ingredients to Japanese companies in the Southeast Asian region have been steady, and there are signs that sales of raw materials for milk products to Japan are also recovering. Also, in addition to transferring sales personnel for dairy ingredients from Singapore to Thailand, where there is plenty of room for market development, sales are being strengthened, such as exhibiting for the first time at the food exhibition “THAIFEX” held in Thailand. Additionally, in Indonesia, LTI has begun handling new dairy ingredients from Oceania, and sales have grown significantly. As a result of these, sales for the second quarter decreased 7.9% from the same period to 9,731 million yen, but sales for the second quarter fiscal period turned to an increase of 3.9% from the same period last year. In terms of profit and loss, profit margins improved because the product mix improved due to a decline in sales of price-appealing products, etc., which contributed to an increase in ordinary profit.

(5) Asia Business (Cheese Manufacturing and Sales Division)

Sales of both processed cheese and natural cheese remained steady, with sales volume of 2,536 tons, up 7.1% from the same period last year, and sales of 2,679 million yen, up 19.3% from the same period last year. The Thai economy, where sales had fallen, is gradually picking up, and sales volume to Thailand is on a recovery trend. In addition, sales to restaurants and bakeries have been steady, mainly in Singapore, Malaysia, etc. However, sales of processed cheese related to Chinese demand continued to be sluggish, and sales to processed food manufacturers were also sluggish due to the impact of the appreciation of the dollar against the currencies of Asian countries. However, in addition to the fact that the cost ratio declined due to a decrease in raw cheese prices, profit margins improved due to the effects of sales price revisions implemented in the previous fiscal year, contributing to an increase in ordinary profit.

(6) Others

In the second quarter, sales were 1,068 million yen, up 304.8% from the same period last year because there was a project to sell dairy ingredients directly to Japanese users at overseas subsidiaries.

3. financial status

In the second quarter of the fiscal year ending 2024/11, due to an increase in domestic business sales and sales volume, accounts receivable increased by 2,944 million yen from the end of the previous fiscal year, inventory assets increased by 1,921 million yen, and working capital of 3,532 million yen after deducting the increase in purchase obligations of 886 million yen was required. Although this working capital was covered by quarterly net profit of 2,260 million yen before tax adjustments, etc., cash flow from operating activities decreased by 1,590 million yen. Therefore, we secured 295 million yen in cash flow from investment activities and 2,195 million yen in cash flow from financial activities such as borrowing long and short loans, etc., and surplus funds were accumulated by 1,125 million yen in cash and deposits. As a result of the increase in cash, deposits, accounts receivable, and inventory assets, current assets increased 6,304 million yen from the end of the previous fiscal year, total assets increased 6,215 million yen, and the balance was 78,253 million yen. Total liabilities increased by 3,969 million yen due to an increase in accounts payable and long and short term loans, and the balance was 51,284 million yen. Total net assets increased by 2,245 million yen, the balance was 26,969 million yen, and the equity ratio was 34.4%, 0.2 points above the end of the previous fiscal year.

(Written by FISCO Visiting Analyst Matsumoto Akihiro)