Morinaga Milk Industry Co (2264) Q2 2025 earnings summary

Executive summary

• Net sales increased 1.4% year-over-year to ¥290.6 billion in 1H FYE March 2025, driven by price revisions and high-value-added products in core and healthcare segments.

• Operating profit declined 16% year-over-year to ¥17.5 billion due to higher raw material, logistics, and personnel costs, falling short of forecasts by ¥1.4 billion.

• Profit attributable to owners of parent dropped 83.6% year-over-year to ¥9.7 billion, reflecting the absence of last year's extraordinary gain from asset sales.

• High-value-added products like "Mt. RAINIER CAFFÈ LATTE" and ice cream performed strongly, while yogurt sales rose but product mix deteriorated due to underperformance of new and functional yogurts.

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

Financial highlights

• Net sales: ¥290,599 million (+1.4% YoY); Operating profit: ¥17,499 million (–16.0% YoY); Ordinary profit: ¥17,247 million (–20.8% YoY); Profit attributable to owners: ¥9,709 million (–83.6% YoY).

• Operating profit margin: 6.0% in 1H FYE March 2025.

• Basic earnings per share: ¥113.56 (down from ¥663.17 YoY, reflecting stock split and lower profit).

• Comprehensive income for the period: ¥18,415 million (–71.2% YoY).

• Profit attributable to owners of parent: ¥9.7 billion (down ¥49.4 billion YoY, reflecting prior-year extraordinary gain from Tokyo Plant sale).

Outlook and guidance

• Full-year net sales forecast revised to ¥560.0 billion (+2.4% YoY); operating profit to ¥28.5 billion (+2.4% YoY, –¥1.5 billion from initial forecast); profit attributable to owners to ¥18.0 billion (–70.6% YoY, due to absence of prior-year extraordinary gain).

• Dividend forecast raised to ¥90 per share for FY25, up ¥30 YoY.

• Continued focus on expanding high-value-added products and functional yogurts, with improved sales promotion efficiency.

• Global Business outlook raised for MILEI but cut for other subsidiaries; radical business review planned.

• Focus remains on cost absorption, product mix improvement, and global business growth.