Maruha Nichiro reports record sales, profit even as chairman resigns

An aquaculture operation run by Maruha Nichiro

Maruha Nichiro, the world's largest seafood company, reported its highest-ever sales and operating profit for the nine month period from April through December.

In its 6 February filing, the Tokyo-based company said that it grew net sales by 18 percent, from JPY 661.2 billion (USD 4.8 billion, EUR 4.5 billion) in the same period of 2021 to JPY 781 billion (USD 5.7 billion, EUR 5.4 billion) in 2022, while operating income rose by 20.4 percent, from JPY 22.3 billion (USD 163 million, EUR 154 million) in 2021 to JPY 26.9 billion (USD 179 million, EUR 186 million) in 2022.

In the breakdown the company gave in its shareholder presentation, the company said that in its Marine Products Business Segment, the Marine Products Trading Unit benefited from a recovery in sales, including of farmed fish, to foodservice and institutional food businesses recovered from the effects of Covid-19 measures.

For the company’s Aquaculture Unit, higher sales volumes and prices of yellowtail and amberjack, and higher market prices for tuna, raised earnings. The company said going forward it will refine its aquafeed formulations to control costs.

In the Overseas Unit, the company’s pet food business in Thailand, and its Alaska pollock operations in North America, drove a strong performance. The company added it was able to increase its pollock production by acquiring Alaska pollock quota by purchasing harvesting and processing assets from Icicle Seafoods, a subsidiary of   New Brunswick, Canada based Cooke Seafoods.

In the Fishery Business Unit, Patagonian toothfish, which the company said is highly profitable, continued its strong performance in both catch and sales. Profitability of the overseas purse seine business for skipjack tuna is improving due to stable operations and cost reductions.

However, the Processed Foods and Foodstuff Distribution Segments struggled, since higher costs ate into profits before sales price rises could be implemented. The company said it expects a tougher business environment in Q4, due to falling market prices for marine products, consumer reluctance to buy, and continued high costs of food products.

The weaker yen resulted in higher costs in yen terms for raw materials and fuel, but the company was able to book foreign-exchange gains of JPY 1.5 billion (USD 11.1 million, EUR 10.4 million) when repatriating its profits. A fire at its Hiroshima plant resulted in an extraordinary loss of JPY 2.9 billion (USD 21.3 million, EUR 20.1 million).

In the Logistics segment, sales and operating income rose despite higher electricity costs, as there was strong demand for storage.

Looking back on significant events of the year so far, the company instituted sweeping price hikes, along with thousands of other food companies; it issued Japan’s first blue bond to fund an RAS salmon farm; and it launched the Sakana X (cross) campaign to raise awareness in interest in seafood.

Looking forward

Photo courtesy of Maruha Nichiro

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