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, Japan-based company reported 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 its 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 186 million, EUR 179 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, amberjack, and 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 purchasing harvesting and processing assets, including quota, from Icicle Seafoods, a subsidiary of Cooke Seafoods.
Maruha Nichiro's Fishery Business Unit reported a strong performance in both catch and sales of Patagonian toothfish. It said the profitability of its overseas purse-seine business for skipjack tuna is improving due to stable operations and cost reductions.
However, Maruha Nichiro's Processed Foods and Foodstuff Distribution Segments struggled as higher costs ate into profits before sales price increases could be implemented. The company said it expects a tougher business environment in Q4, due to falling market prices for marine products, consumers' increasing reluctance to buy, and continued high costs for food products.
A weaker Japanese yen resulted in higher costs 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 a one-time loss of JPY 2.9 billion (USD 21.3 million, EUR 20.1 million).
In Maruha's Logistics segment, sales and operating income rose despite higher electricity costs, as there was strong demand for storage.
In 2022, the company instituted sweeping price hikes, issued Japan’s first blue bond to fund the construction of a land-based salmon farm; and launched the Sakana X (cross) campaign to raise awareness in interest in its seafood products.
Looking forward, the company plans to replace an aging factory trawler used by its New Zealand subsidiary, Tekapo Ltd. to catch southern whiting, hake, squid, and silver warehou. Maruha Nichiro is the only foreign company to own fishing quota in the New Zealand exclusive economic zone, and catches about 5.5 percent of the country’s total quota.
On 31 January, after the close of its Q3, the company announced the resignation of its chairman and representative director, Shigeru Ito, due to health reasons. He had been in the position since 2020. Masaru Ikemi, who replaced him as CEO in 2020, became the sole representative director.
The company forecast full-year net sales will rise 11.9 percent to JPY 970 billion (USD 7.1 billion, EUR 6.7 billion), and operating income will rise 13.4 percent, to JPY 27 billion (USD 198 million, EUR 187 million) in the current fiscal year ending March 31, 2023.
Maruha Nichiro is currently operating under a medium-term plan covering the fiscal years 2022 through 2024. In that plan, its target for the next fiscal year, FY 2024, is net sales over JPY 960 billion (USD 7 billion, EUR 6.6 billion), and operating profit of over JPY 27 billion (USD 198 million, EUR 187 million). Thus, if the current fiscal year forecasts holds true, the company will have met these targets a year early.
The plan emphases “strategic inorganic growth,” which is to say, acquiring other companies to gain access to resources, while taking care to maintain a favorable credit rating. Specifically, the company plans to allocate JPY 50 billion (USD 367 million, EUR 347 million) for acquisitions to expand the overseas market, and enhance its fine chemical, frozen food, and pet food businesses.
Photo courtesy of Maruha Nichiro
