Meiji Adjusts Profit Forecasts Amid China Dairy Challenges
Source: The DairyNews
Meiji Holdings, a prominent Japanese dairy company, has revised its profit forecasts downward, citing challenges in its China business segment.
The company highlighted increased competition in China's fresh milk and yogurt markets as key factors impacting its financial outlook.
Despite raising its sales projections for the fiscal year ending on March 31, Meiji anticipates lower-than-expected results in ordinary profit and shareholder returns. In a filing with the Tokyo Stock Exchange on April 9th, Meiji disclosed plans to incur a Y22.5 billion ($148.2 million) extraordinary income charge in the final quarter of the year, primarily related to the sale of investment securities.
Additionally, the company expects to record an impairment loss of approximately Y14.3 billion on non-current assets associated with its drinking milk and yogurt business in China. Meiji attributed this impairment to the shifting sales environment in China, characterized by intensified price competition, resulting in decreased profitability.
The downward adjustment in profit forecasts includes a revision of shareholder profits from Y51 billion to Y48 billion. Furthermore, Meiji now anticipates ordinary profit to reach Y76 billion, down from the previous forecast of Y78 billion. These adjustments reflect the company's efforts to navigate the challenges posed by evolving market dynamics in its China operations.
Despite raising its sales projections for the fiscal year ending on March 31, Meiji anticipates lower-than-expected results in ordinary profit and shareholder returns. In a filing with the Tokyo Stock Exchange on April 9th, Meiji disclosed plans to incur a Y22.5 billion ($148.2 million) extraordinary income charge in the final quarter of the year, primarily related to the sale of investment securities.
Additionally, the company expects to record an impairment loss of approximately Y14.3 billion on non-current assets associated with its drinking milk and yogurt business in China. Meiji attributed this impairment to the shifting sales environment in China, characterized by intensified price competition, resulting in decreased profitability.
The downward adjustment in profit forecasts includes a revision of shareholder profits from Y51 billion to Y48 billion. Furthermore, Meiji now anticipates ordinary profit to reach Y76 billion, down from the previous forecast of Y78 billion. These adjustments reflect the company's efforts to navigate the challenges posed by evolving market dynamics in its China operations.
