Tokyo, Japan-based frozen foods company Nichirei's FY 2024 report revealed the company had increased revenue but a low return on equity as it faced high raw material and energy prices.
Nichirei, which also handles logistics and trade for seafood and meat products in addition to its frozen food operations, reported net sales of JPY 680.1 billion (USD 4.6 billion, EUR 4.2 billion) for FY 2024, up 2.7 percent year over year. Profit attributable to the owners of the parent company rose 14 percent from the previous fiscal year to JPY 24.5 billion (USD 167.3 million, EUR 151.8 million), and the company's profit margin also improved from 3.3 percent to 3.6 percent.
Though it saw some improved financial metrics, a major challenge for Nichirei, as well as for its competitors, has been low return on equity (ROE). Many companies aim to have a return on equity of at least 10 percent, and Nichirei was able to just clear that benchmark with a 10.3 percent ROE in FY 2024, up from 9.9 percent the year prior. The company said it aims to maintain ROE above 10 percent from FY 2025 onward.
The company said its Processed Foods segment performed well in FY 2024 due to price hikes implemented in the previous fiscal year and a focus on commercial use items. The net operating profit ratio for the segment was 6 percent, and the segment accounted for 47 percent of the company’s total operating profit of JPY 36.9 billion (USD 241.2 million, EUR 223.2 million).
The Logistics segment, which includes cold storage, was the second-biggest contributor to Nichirei’s total operating profit, accounting for 42 percent of the total. It had a net operating profit of 6.2 percent.
The Marine Products and Meat and Poultry segments lagged behind the performance of other segments, with net operating profit ratios of just 1 and 1.3 percent, respectively, and contributing a mere 0.01 and 0.03 percent of the total operating profit.
The company confirmed it focused …
