Ajinomoto raises full-year forecast as AI server boom drives semiconductor materials demand

Ajinomoto Co Inc reported record first-quarter sales and a 127% year-over-year surge in business profit for Q1 fiscal year 2027. This strong performance was primarily driven by robust demand for Ajinomoto Build-up Film (ABF) used in AI servers and networks, prompting the company to revise its full-year forecast upward. While the CDMO and overseas seasonings segments also posted solid growth, the company faces a projected JPY 25 billion annual cost increase due to escalating Middle East tensions.

Functional Materials AI server demand

• ▪The margin improvement in Ajinomoto Co Inc's ABF business during the first quarter of fiscal year 2027 was primarily driven by an improved product mix, with strong sales growth in high value-added ABF for AI servers and networks.
• ▪Ajinomoto Co Inc's functional materials segment, particularly Ajinomoto Build-up Film (ABF) for AI servers and networks, experienced robust demand and significant sales and profit increases in the first quarter of fiscal year 2027.
• ▪Ajinomoto Co Inc's functional materials segment recorded approximately 11% sales growth and 24% profit growth in the first quarter of fiscal year 2027.

Q1 2027 profit growth

• ▪Ajinomoto Co Inc achieved record first-quarter sales and profit attributable to owners, with business profit growing 127% year-over-year in the first quarter of fiscal year 2027.
• ▪Ajinomoto Co Inc's profit attributable to owners of the parent jumped 34.4% year-over-year in the first quarter of fiscal year 2027, with earnings per share rising 38.8%.
• ▪Ajinomoto Co Inc's business profit excluding currency translation climbed 12.4% year-over-year in the first quarter of fiscal year 2027, pushing the business profit margin to approximately 13%.

CDMO business performance

• ▪Ajinomoto Co Inc's CDMO business profit increased by approximately JPY 2.9 billion in the first quarter of fiscal year 2027.
• ▪Ajinomoto Co Inc's Contract Development and Manufacturing Organization (CDMO) business posted increased sales and profit in the first quarter of fiscal year 2027, driven by strong performance in small molecules and gene therapy.

Middle East cost pressures

• ▪Ajinomoto Co Inc faces a projected annual cost increase of approximately JPY 25 billion due to escalating tensions in the Middle East, which are impacting logistics, packaging, and raw materials.
• ▪Ajinomoto Co Inc is taking proactive measures, including price adjustments and cost reduction initiatives, to absorb the estimated JPY 25 billion cost impact from the Middle East situation.

Overseas seasonings profitability

• ▪Ajinomoto Co Inc's seasonings and food products saw increased sales and profits in both Japan and overseas during the first quarter of fiscal year 2027, with strong growth in key markets like Indonesia and Vietnam.
• ▪Ajinomoto Co Inc's Overseas B2C unit prices rose around 3% in local currency during the first quarter of fiscal year 2027, while overall Overseas volume declined about 1% due to price hikes and inflation.

Full-year forecast revision

• ▪Ajinomoto Co Inc revised its full-year forecast upward during its first-quarter earnings call on August 6, 2026, driven by robust demand for ABF in AI servers and networks.
• ▪Ajinomoto Co Inc reiterated its commitment to achieving its fiscal 2025 forecast and 2030 roadmap, pointing to 3% organic sales growth and a 12.4% rise in business profit excluding foreign exchange.

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