JAPAN: Major household products manufacturer Lion Corporation is likely to lower its group net profit forecast for the fiscal year ending in December to roughly $30.4 million, a drop of 37% on the year. The company had earlier predicted its net profit would creep down 1% to $47.8 million.
At the end of August, Lion voluntarily recalled pest repellents it launched in March 2007 due to incidences of the jet aerosol catching fire. Because it had already shipped 3.25 million containers of the Varsan Hyosatsu Jet Spray, the company was hit with expenses to recover store inventories in the first half. It logged an extraordinary loss of $8.7 million in the half as a result.
Recall costs have swelled in the second half. Including losses from disposing of the products, it likely booked another extraordinary loss of $8.7 million as well in the July-September quarter. Extraordinary losses from the bug sprays ballooned to $17.4 million in the first nine months of the year. Recalls are ongoing at press time.
According to Nikkei, although the firm has struggled amid stiff domestic production for its household items, it has enjoyed better-than-expected sales overseas, especially in Asia.