The cosmetic ingredient company has posted slight growth in the first six months of the year. Kao released its financial results for the first half of 2023 on 8 August, with the company feeling the effects of inflation, geopolitical tension in Europe and weak market growth in China.
The chemicals company reported net sales growth of just 0.6% compared to the same period last year, with the figure coming in at 738.5 billion yen. Operating income, as reported in the company's press release, was lower this time around, at just 15 million yen.
Kao's fastest-growing divisions this year were those dedicated to cosmetics, substances and ingredients for personal care and home care. Sales in this sector increased by 6.8% to 1880 billion yen. In the case of health and beauty products, sales have managed to increase especially in skin care products. In the case of Japan, new make-up and photo-protection products have contributed to this increase. In the cosmetics area, on the other hand, although very slight, sales declined by 0.2%.
Kao Corporation saw its turnover grow especially in Japan, with sales increasing by 2.4%, although Asia only grew by 0.2% compared to last year. The American continent, on the other hand, saw a 14.4% increase in sales, and Europe recorded a rise of 11.4%.
In the same press release, the company concluded that the markets, especially in Asia, are still in a process of recovery and stabilisation after the Covid-19 crisis. Kao Corporation has also revised its forecasts for the remainder of the year and expects to raise approximately 60 billion yen by the end of 2023. These changes have already been reviewed by the company's board of directors and it has agreed to reorganise inefficient businesses, reform human capital and modify the company's purchasing power. However, the company has stated that the measures will be finalised in the near future.
At the end of the year in 2022, Kao posted a profit and a 9.3% increase in sales over the 2021 financial year, but said that the pre-pandemic levels of 2019 had not yet been consolidated. In that case, the main obstacle they faced was the shortage and scarcity of raw materials and the politically unstable situation in Europe caused by the war between Europe and Russia.