Maruha Nichiro quarterly earnings down
Maruha Nichiro's consolidated financial results for the first quarter of fiscal year 2019, released in August, showed sales up 1.1 percent, but operating income down by 31.9 percent. Ordinary income declined by 22 percent to about JPY 6.9 billion (USD 62.2 million, EUR 53.6 million), according to the company.
The company attributed its lackluster performance mainly to high material prices, which it identified as a short-term issue. The full-year prediction of the Tokyo-based seafood giant adjusted is a decline of 3.3 percent from the previous year, unchanged from a previous guidance.
The logistics business performed well on strong refrigerated storage demand in urban areas despite an increase in power costs due to higher fuel cost that affected refrigerated storage costs.
However, the company’s household frozen food unit, which makes such items as fish sausage, chikuwa (a Japanese snack food), and desserts, was dragged down by a declined in lunchbox item sales (Japanese mothers often prepare boxed lunches for their children, using a variety of small frozen fish and other foods). And despite strong demand for the company’s canned mackerel and sardines, that division’s profits were hurt by tight supplies of raw materials.
To compensate, the company succeeded in increasing sales and profits of dessert items. In addition, the company sought to maximize growth in sales of commercial food. were similar to the previous year, with nursing care meals and convenience store sales strong, but overall profits were down due to soaring fish prices and slow movement of Maruha Nichiro’s own products, the company said.
Becoming the number one frozen and nursing care food supplier in Japan is one of the company’s long term corporate goals. Rising into a leading manufacturer of marine-based functional products is another long-term goal, according to corporate documents.