Maruha Nichiro operating profit decreased 11 percent last fiscal year
Tokyo, Japan-based Maruha Nichiro Corporation, the world’s largest fishery company by revenue, on 15 May reported its consolidated financial results for the fiscal year ending March 2019. Sales were up from the previous year by 0.4 percent, but operating profit fell 11.2 percent. The company’s net profit rose 3.7 percent.
In its fishery and aquaculture business, sales decreased, as typhoons hurt bluefin farming operations. Declining tuna and bonito prices also contributed in pushing the division’s profits down by 7.5 percent.
In its commercial business, which trades and processes fish and livestock products worldwide, higher prices for major fish species resulted in higher revenues but lower profits, as the company’s costs were also higher. In the consignment business, summer typhoons reduced turnover of fresh fish, so sales and income declined. Volumes handled of pork and chicken were down, and the profit ratios for beef and chicken were lower. As a result, the overall sector sold 1 percent less and recorded 31.1 percent lower operating income.
In the company’s foreign operations division, which sells seafood and processed food in China and Thailand, processes seafood in North America, and operates fishing vessels in Australia and New Zealand, operating income decreased by 17.4 percent. However, increased pet food sales in Thailand and the addition of a new vessel in New Zealand resulted in increased sales of 3.7 percent for the sector. But profits were dragged down by lower catches in Australia and New Zealand, and price competition from other countries for the company’s Thai shrimp.
In the processing business, sales of frozen foods for home use – such as for children’s lunch boxes – decreased, but plant productivity was increased. The unit benefited from a health craze for canned fish, such as salmon, sardines, and mackerel, and increased focus on profitable dessert products. Sales of food for commercial use, such as nursing homes and convenience stores, increased, but profits were dragged down by higher meat costs and lower sales of products made in the company’s own plants. Furthermore, chemical sales, including sales of DHA and EPA were favorable, the company reported. Overall for the sector, sales gained 1.2 percent and operating income rose 18.8 percent.
Despite a fire at one of the company’s logistics centers and typhoon damage at another, in addition to higher fuel costs, strong demand for storage in metro areas allowed the logistics sector to boost sales by 2.4 percent, and operating income by 0.4 percent.
In its guidance on the next fiscal year, Maruha Nichiro expects an increase in sales of 1.9 percent and a rise in operating profit of 17.2 percent.