Profits for Mitsubishi Corporation, the fifth largest seafood company by revenue, declined by JPY 55.3 billion (USD 506 million, EUR 448 million), or a little over 9 percent, from last year, according to the company’s annual report for the fiscal year ended March 2020. The fall was mainly due to lower income in its automotive, liquid natural gas and petrochemical businesses.
The Tokyo-based conglomerate’s seafood businesses are organized into the Marine Products Department of its Food Industry Group. They include Norway-based salmon and trout farmer Cermaq; Thailand-based shrimp farmer TMAC; and seafood processor Sanyo Foods – based in Ichikawa City, Chiba Prefecture, Japan – which makes smoked salmon and terrines.
Tokyo-based subsidiary Toyo Reizo distributes marine products and offers cold storage and logistics. U.K. food distributor subsidiary Princes handles some canned fish and fish spread products in its lineup. In the same group, but under the Grain, Oilseeds, and Feed Materials Department, is its subsidiary animal feed maker, Nosan Corporation, which makes aquaculture feeds.
Profits of the Food Industry Group were JPY 53.2 billion (USD 488 million, EUR 431 million), an increase of JPY 43.3 billion (USD 397 million, EUR 352 million) year-on-year, for a 437 percent gain, reflecting a rebound from an impairment loss in its overseas food materials business last year and a one-off gain in the same business this year. The one-off losses were impairment losses on an investment in Singapore-based Olam International, a trader in sustainable nuts, coffee, and cocoa; on U.S. grain business Agrex; and an allowance for restructuring of Princes. The gains mainly relate to sales of Olam assets.
Mitsubishi Corporation’s equity in the earnings of its principal subsidiaries in the seafood sector were reported. That for Cermaq declined by 51 percent, while that for Nosan rose by 19 percent. Equity in the earnings of Princes rose 125 percent, and that for Toyo Reizo fell by 123 percent, as the subsidiary went into the red.
The company did not forecast earnings for the fiscal year ending March 2021 – as the effects of COVID-19 countermeasures are still unknown – but will stick to previous plans to increase dividends and buy back shares. Going forward, the company projects improved revenues from Cermaq, the world’s third largest salmon farming company.
Its sales (in Gross Weight Equivalent) from its three bases were: 72,600 metric tons (MT) in Norway, 18,200 MT in Canada, and 85,400 MT in Chile. Mitsubishi is also partnering with Japanese telecom company NTT to develop a digital exchange platform linking retailers and wholesalers to manage food logistics and inventory, and expects to start seeing income from this emerging field.
Regarding the hit from COVID-19, car sales at Mitsubishi Motors will take a hit as consumers hold off on major purchases. Helping it to weather the storm, the company’s debt-to-equity ratio has been brought down to 1 (debt equal to equity) from 2 at the time of the subprime housing loan crisis. The company is gradually shifting from trading to operating vertically integrated businesses.
