The Maruha Nichiro Corporation reported in its consolidated financial results for the fiscal year ending in March 2023 its sales exceeded JPY 1 trillion (USD 7 billion, EUR 6.4 billion) for the first time in the company’s history.
The Tokyo-based seafood conglomerate – which employs over 13,000 people, has around 150 subsidiaries, and is the world’s largest seafood company by revenue – reported sales reaching just over JPY 1.02 trillion (USD 7.1 billion, EUR 6.5 billion) in sales for the year, up 17.7 percent.
Maruha Nichiro attributed the increase to its effort to increase prices for both its fish and processed foods in response to higher material costs.
The company previously reported its highest-ever sales and operating profit for the nine-month period from April through December.
Several other metrics besides sales also showcased the company's positive growth compared to its 2022 fiscal year. Maruha Nichiro's operating income totaled JPY 29.6 billion (USD 211.9 million, EUR 196.9 million), up 24.2 percent; its ordinary income jumped to JPY 33.5 billion (USD 239.8 million, EUR 222.9 million), up 21.4 percent; and the profit attributable to the owners of the parent company reached JPY 18.6 billion (USD 133.3 million, EUR 123.7 million), up 10 percent.
Maruha Nichiro's pet food business in Thailand contributed significantly to its overall operating income, benefiting from a strong U.S. dollar and a weakened Thai baht.
Maruha Nichiro’s Alaska pollock operations within its overseas business unit also raised its overall operating income. In February 2022, two Alaska community Development quota groups joined with Maruha Nichiro to buy nine pollock-fishing vessels, inshore pollock quota, and processing capacity from Evening Star Fisheries and Cooke-owned Icicle Seafoods in February 2022. The segment increased its sales by 45 percent to JPY 230.5 billion (USD 1.6 billion, EUR 1.4 billion) from JPY 158.9 billion (USD 1.1 billion, EUR 1 billion) the year prior. Operating income for the segment also increased, jumping 44.7 percent, or JPY 4.2 billion (USD 29 million, EUR 26 million), to JPY 13.4 billion (USD 94 million, EUR 86 million).
Sales within Maruha Nichiro's marine products business segment rose 23.8 percent year-over-year, from JPY 483.6 billion (USD 3.3 billion, EUR 3.1 billion) in FY 2021 to JPY 598.5 billion (USD 4.2 billion, EUR 3.8 billion) in FY 2022. Operating income for the segment also grew 60.2 percent, from JPY 13.3 billion (USD 93 million, EUR 85 million) in FY 2021 to JPY 21.4 billion (USD 150 million, EUR 137 million) in FY 2022.
Within the segment, sales in Maruha Nichiro's fishery business unit were up 34.2 percent year-over-year, increasing from JPY 31.5 billion (USD 221 million, EUR 202 million) to JPY 42.2 billion (USD 296 million, EUR 271 million), reflecting strong sales of Patagonian toothfish, which saw operating profits rise 569.4 percent from JPY 300 million (USD 2.1 million, EUR 1.9 million) to JPY 1.8 billion (USD 12.6 million, EUR 11.5 million) due to the recovery of fish prices.
The company's marine products trading unit, which is the largest in the segment, experienced an 11.3 percent year-over-year rise in sales, increasing from JPY 278.6 billion (USD 1.9 billion, EUR 1.7 billion) in FY 2021 to JPY 309.9 billion (USD 2.1 billion, EUR 1.9 billion) in FY 2022. The segment also enjoyed a 19.2 percent rise in operating income, increasing from JPY 3.8 billion (USD 26 million, EUR 24 million) in FY 2021 to JPY 4.5 billion (USD 31 million, EUR 28 million) in FY 2022. The lifting of COVID-19 emergency measures that had restricted restaurant hours nationwide in Japan led to a recovery of food service and institutional sales, the company said.
Sales in Maruha Nichiro's marine products trading unit slowed in the fourth fiscal quarter, as prices for some fish species dropped and anticipation that other species would reach new peaks faded. However, overall operating income in the unit rose year-over-year due to positive performance through Q3 2022.
Maruha Nichiro's aquaculture business unit was unprofitable in FY 2022, but in FY 2023, sales rose 8.4 percent due to higher prices for yellowtail, amberjack, and farmed bluefin tuna, it reported. Overall earnings for the company's aquaculture business totaled JPY 1.6 billion (USD 11.4 million, EUR 10.6 million) for the year. In July 2022, the company partnered with Mitsubishi during FY 2023 to form land-based salmon firm Atland, where it plans to begin operations at the firm’s new farm in 2025 and complete its first delivery by 2027.
In its logistics segment, sales were up by 6.1 percent, from JPY 16.6 billion (USD 116 million, EUR 106 million) to JPY 17.6 billion (USD 123 million, EUR 112 million) while strong demand for storage space pushed a 43.8 percent, or JPY 500 million (USD 3.5 million, EUR 3.2 million), increase in operating profit year-over-year.
In the processed foods business segment – one of two segments to report declines – the processed foods business unit saw a 1.6 percent, or JPY 1.5 billion (USD 10.5 million, EUR 9.6 million), gain in sales, reaching JPY 98.9 billion (USD 695 million, EUR 634 million), but operating income fell 56 percent, or JPY 2.2 billion (USD 15.4 million, EUR 14.1 million), to JPY 1.7 billion (USD 11.9 million, EUR 10.9 million). A fire at its Hiroshima plant resulted in lost sales opportunities while rising material and energy prices ate into profits, it said.
The fine chemicals portion of Maruha Nichiro's processed foods segment gained 13.5 percent, or JPY 900 million (USD 6.3 million, EUR 5.7 million), in sales due to strong demand for heparin and health foods, and its operating income rose by 23.5 percent, or JPY 300 million (USD 2.1 million, EUR 1.9 million).
The foodstuff distribution business segment, the other segment that saw a decrease in operating income, saw a 10.7 percent, or JPY 20.5 billion (USD 144 million, EUR 131 million), increase in sales to JPY 211.3 billion (USD 1.4 billion, EUR 1.3 billion); but a 30.1 percent, or JPY 1 billion (USD 7 million, EUR 6.4 million), decrease in operating income. Maruha Nichiro said the segment struggled due to increased costs and a delay in raising prices to reflect higher material costs.
Maruha Nichiro's smaller meat and products business, which is lumped into its foodstuff distribution business unit, saw sales rise 21 percent, or JPY 14.9 billion (USD 104 million, EUR 95 million), to JPY 86 billion (USD 605 million, EUR 551 million). The segment’s operating profit increased 18.7 percent, or JPY 100 million (USD 703,000, EUR 641,000), to JPY 800 million (USD 5.6 million, EUR 5.1 million) on higher imported meat prices and increased sales of pork from Europe, as well as steady sales of domestic beef.
In the coming year, the company expects higher costs in procuring marine products. To make up for this, the price increases it already implemented in its food products business should offset expected higher material costs, it said. But the company remains worried about the broader macroeconomic picture globally.
"Given the stalling of the European and U.S. economies due to inflation, a year-over-year decline in operating income in the first half of the year is expected," Maruha Nichiro said in its results overview.
For FY 2024, Maruha Nichiro will increase its annual shareholder dividend by JPY 5 (USD 0.04, EUR 0.03) to JPY 70 (USD 0.48, EUR 0.45) while switching from an annual to a semi-annual dividend system.
Photo courtesy of Maruha Nichiro
