Japanese seafood conglomerate Nissui recorded an 8.2 percent bump in sales and a 21.1 percent increase in operating profit in its 2023 fiscal year, which ended 31 March 2024.
Nissui’s net sales in FY 2023 reached JPY 831.3 billion (USD 5.3 billion, EUR 4.9 billion), and its operating profit hit JPY 29.7 billion (USD 189.9 million, EUR 175.5 million). Its ordinary profit rose 15.1 percent to JPY 32 billion (USD 204.6 million, EUR 189.1 million), and its profit attributable to the owners of the parent company rose 12.3 percent to JPY 23.9 billion (USD 152.8 million, EUR 141.2 million).
“For the company and its group, the Food Products business saw the positive effects of domestic and international increasing sales prices and decreasing raw material prices, resulting in a significant profit rise,” Nissui said. “In the Marine Products business, profit decreased as the market prices of our main products, such as salmon and surimi, decreased in Japan and overseas, while the domestic fishery business was firm.”
Favorable foreign exchange, driven by the weakening of the Japanese yen, helped both Nissui’s Marine Products division and its Food Products division, despite what the company termed “a decline in market conditions.”
Net sales within its Marine Products division rose 2.6 percent to JPY 336 billion (USD 2.2 billion, EUR 2 billion), while its operating profit sunk 42.2 percent to JPY 10.6 billion (USD 67.8 million, EUR 62.6 million). Sales in its Food Products division rose 16 percent to JPY 443 billion (USD 2.8 billion, EUR 2.6 billion), and its operating profit rose 138.8 percent to JPY 27.2 billion (USD 173.9 million, EUR 160.7 million).
“Through successful price adjustments in Japan and overseas, significant earnings growth in the food business covered the decline of other businesses,” Nissui said. “The Marine Products business performed well through a strong catch in the fishery business and the expansion of coho salmon farming in Japan. However, the Marine Products business faced challenges in Japan and overseas due to the market downturn.”
Nissui recorded a strong sardine catch but a decline in sales of Japanese amberjack. It said it achieved greater coho salmon and trout production, as well as survival rates, but said the market situation for salmon and trout “has entered an adjustment phase."
“This has decreased profit due to the assessment loss on the fish in stock of approximately JPY 2.8 billion [USD 17.9 million, EUR 16.6 million],” it said.
Nissui said its North American processing business experienced decreased profits “due to wage increases and price declines, despite [a] production increase.” An increase in the catch quota for Alaskan pollock increased the production volume for Nissui’s North American processing business, but its profits declined due to rising costs and a sharp decline in the price of pollock surimi and fillets caused by increasing supply, it said. A write-down of pollock inventories also hurt Nissui’s European business, it said.
Nissui said it had concerns about the Japanese economy “due to factors such as inflation caused by the prolonged situation in Ukraine and other uncertainties” but that both the Japanese economy and the global economy remained relatively stable, with Nissui posting increasing sales in Japan and the U.S. but a decline in Europe.
“The economy was steady in the U.S., with continuous improvement in employment and increasing personal consumption, while in Europe, the economy was slow, mainly in Germany, as the demand decreased due to monetary tightening,” it said. “In the trading business, there was a decrease in earnings due to the deteriorating market in Japan and overseas. We successfully increased selling prices in Japan and overseas, which led to an increase in profits.”
Those price increases helped Nissui’s seafood processing and trading business, it said, and its sales of shrimp, fish oil, and fishmeal performed well.
“However, we accelerated the early disposal of unprofitable inventory as fish market prices for key products such as salmon/trout, surimi, and imported frozen tuna entered an adjustment phase,” it said.
Its Processed Foods division posted increased year-over-year sales and profit due to improving sales of frozen food to the foodservice sector, but Nissui noted a decrease in sales of processed foods for home consumption due to higher prices and recovering restaurant visitation rates.
“In addition to improving U.K. operations, we expanded our sales to Spain and Italy,” Nissui said, regarding its Processed Foods division. “While we observed a decrease in sales volume in Germany, the impact of price increases and decreasing raw material costs led to increased sales and profit.”
Nissui said it wants to expand its overseas seafood business and strengthen its profitability, with a focus on fresh fish procurement and processing in the North Sea, North America, and the utilization of its Musashino Foods subsidiary, which it acquired in April 2024. It also plans to increase its exports of Japanese marine products, including scallops, “to maximize synergies between Japan and Europe.”
As part of a plan announced in February 2024 to spend JPY 17 billion (USD 113 million, EUR 105 million) to expand its seafood-processing capabilities in the United States and European Union, Nissui singled out a focus on becoming the world’s top fried whitefish and shrimp product-maker. It reiterated that goal in its FY 2023 results, saying it plans to lean on healthy food trends and innovation to drive sales.
Nissui said it expects net sales of JPY 875 billion (USD 5.6 billion, EUR 5.2 billion) in FY 2024, operating profit of JPY 32.5 billion (USD 207.8 million, EUR 192.1 million), ordinary profit of JPY 35 billion (USD 223.8 million, EUR 206.8 million), and profit attributable to the owners of the parent company of JPY 24 billion (USD 153.5 million, EUR 141.8 million).
It is predicting a JPY 14.2 billion (USD 90.8 million, EUR 83.9 million) increase in sales and a JPY 3.75 billion (USD 2.4 million, EUR 2.2 million) net profit from its Marine Products division in FY 2024. For its Food Products division, it predicted a JPY 27.2 billion (USD 173.9 million, EUR 160.7 million) increase in net sales but JPY 1.8 billion (USD 11.5 million, EUR 10.6 million) less profit than in FY 2023.
“We anticipate a decline in the seafood market, which shows signs of bottoming out,” it said. “The Marine Products business plans to cover the decrease in the Food business by recovering due to the positive impact of the profit increase of aquaculture in South America … and we will cover the decline of domestic aquaculture [in Japan], which is expected to be affected by rising feed prices, by improving the profitability of processing and trading businesses due to a bottoming out of the fish market and the reduction of unprofitable inventory," Nissui said. "Furthermore, we anticipate the positive impact of evaluating fish in aquaculture cages in South America.”
