Japan Tobacco Inc. said Thursday it expects group operating profit for the business year to March 2009 to fall 27.8 percent from a year earlier to ¥311 billion because of the lingering impact of the tainted Chinese dumplings scare.
It would be JT's first drop in operating profit in eight years.
JT expects group net profit to fall 38 percent to ¥148 billion.
The major cigarette maker said the group's food business will continue to suffer from the fallout from the food-poisoning outbreak, which sickened 10 people who ate pesticide-laced "gyoza" (dumplings) imported from China and distributed by subsidiary JT Foods Co.
"The sales of our frozen foods for households remain 70 percent lower (than before the food scare broke in January)," JT President Hiroshi Kimura told a news conference.
"We expect it to take time before sales recover. What makes things worse is that the cause of the poisoning has not been pinned down," he said.
But Kimura said the group has no plans to withdraw from food-related businesses.
The JT group expects the impact of the gyoza scare to shave ¥22 billion off its group sales for the business year ending next March, and ¥6.5 billion off group operating profit.
For the year ended last March, JT said it logged a ¥430.6 billion group operating profit, up 29.7 percent from the previous year, mostly thanks to cigarette sales earned by British maker Gallaher Group PLC., which JT acquired last year, and food business revenue from Katokichi Co., which it acquired earlier this year.