World’s largest seafood company reports lower profits

Published on
June 1, 2020

The world’s largest seafood company issued its consolidated financial results for fiscal year 2020 on 28 May.

Tokyo, Japan-based Maruha Nichiro is the world’s largest seafood company by revenue, with FY2020 sales of JPY 905.2 billion (USD 8.4 billion, EUR 7.5 billion), down 17.3 percent from a year ago.

The company posted a profit attributable to the owners of the parent of JPY 12.5 billion (about USD 116 million, EUR 105 million) for the year ended March 2020. This was down by 4.2 percent from the previous year.

In the company’s Fisheries and Aquaculture segment, net sales increased 10 percent due to increased skipjack catch and farmed bluefin tuna harvest. However, operating income fell 120 percent, ending in a loss, because skipjack prices were low and bluefin farming costs were high. At present, COVID-19 is affecting fishing operations, as transport of crews has been hindered and boats remained tied at dock in many areas. Looking forward, the company plans to increase its bluefin output by utilizing a new farming site acquired from Toyo Reizo in January 2020, and to increase yellowtail and amberjack production through artificial fertilization.

In the Trading segment, net sales declined by 2 percent, with sales of meat up but marine products wholesaling down. Operating income fell by 24 percent, mainly due to a fall in imports of bluefin tuna and stagnant exports of luxury items to China. The company plans to respond to COVID-19 by shifting toward products for at-home consumption.

In the Overseas Business segment, sales fell 5 percent, while operating income plummeted by 43 percent. North American operations were in the red, due to more competition in catching salmon, a decline in market prices for salmon and crab, and a tighter Pacific cod quota. But other regions did better than last year, due to strong fish catches in New Zealand and new pet food production lines in Thailand. Going forward, the company plans to cut costs at its Peter Pan Seafoods subsidiary – reportedly being offered for sale – and to collaborate with other companies for fish sourcing in North America.

Sales of the Processed Foods segment were just marginally lower, while operating income rose 9 percent. Sales of canned mackerel declined, but overall, canned products did well. Productivity improvements in the processing of institutional foods led to higher profits. Sales of DHA and EPA products and freeze-dried products were also strong.

In the Logistics segment, sales edged up 1 percent, while operating income rose 10 percent on lower depreciation expenses.

Photo courtesy of Igor Golovniov/Shutterstock

Contributing Editor reporting from Osaka, Japan

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