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By
AFP
Published
Apr 30, 2008
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Japan's Shiseido reports profits surge on China cosmetics boom

By
AFP
Published
Apr 30, 2008


Shiseido collection 2008
TOKYO, April 30, 2008 (AFP) - Japan's top cosmetics maker Shiseido Co. said Wednesday May 1st net profits rose 40.2 percent in the fiscal year to March as it cashed in on booming demand for beauty products in China.

A weak yen also boosted the group's bottom line but the positive effect is set to fade this year, the company said.

Annual net profit came to 35.46 billion yen (341 million dollars) as operating profit gained 26.9 percent to 63.47 billion yen on revenue of 723.48 billion, up 4.2 percent, Shiseido said in a statement.

China has become a key market for Shiseido, which is suffering from lacklustre sales in Japan where the population is both ageing and shrinking.

Annual domestic sales declined 2.3 percent while overseas sales were up 17.6 percent.

In Japan's cosmetics market, Shiseido said it had "struggled in the face of cooling consumer sentiment and the onslaught of new products from competing companies."

The group expects a sharp slowdown in earnings growth in the current fiscal year to next March as a stronger yen cuts into overseas revenue.

It forecast a 1.5 percent rise in annual net profit to 36 billion yen, a 2.4 percent gain in operating earnings to 65 billion yen and a 0.9 percent increase in revenue to 730 billion yen.

"In China, where we anticipate strongest growth, we will innovate the Aupres brand for department stores and continue taking proactive initiatives to further expand our network of voluntary chain stores," it said.

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