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Shiseido Co., the nation’s largest cosmetics maker, said Wednesday it remained in the red in the 2001 business year due to appraisal losses on its shareholdings and other extraordinary losses stemming from product recalls.

The company said it logged group net losses of 22.77 billion yen, having posted losses of 45.09 billion yen in 2000.

Shiseido was forced to recall products containing cow-based ingredients in the wake of the September outbreak of mad cow disease, or bovine spongiform encephalopathy.

Moreover, a government-mandated requirement that cosmetics makers list every ingredient used in a product on its label means that many products need to be relabeled before the new regulation takes effect in October.

Aside from these extraordinary losses, Shiseido posted group pretax profits of 27.56 billion yen in 2001, down 16.5 percent from the previous year, on sales of 589.96 billion yen, down 0.9 percent.

Of the firm’s total sales, those generated on the domestic market fell 6.4 percent due primarily to inventory adjustments, while overseas revenues showed a strong 24.5 percent rise in yen terms, the company said.

Shiseido will pay a full-year dividend of 16 yen per share, including an interim dividend of 8 yen, which it has already paid.

The company paid the same full-year dividend the previous year.

For this business year, the company expects to generate group net profits of 25 billion yen and group pretax profits of 43 billion yen, on sales of 625 billion yen. Shiseido said it plans to increase its full-year dividend to 20 yen per share.

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