Three Japanese conglomerates recently released their quarterly results, revealing the impact the COVID-19 pandemic has had on some of the world's biggest seafood firms.
Tokyo-based Nippon Suisan Kaisha, Ltd. (Nissui) reported in its financial results through the third quarter of fiscal year 2020 that sales and operating profit had declined by 5.6 percent and 21 percent, respectively, compared to the same period in 2019. The consolidated forecast for the full year, ending on 31 March, indicated steeper declines, with sales expected to be down by 5.8 percent and profit down by 34.5 percent.
In Japan, consumer spending was hindered by the spread of COVID-19 at the start of 2020. However, it recovered in May, when the state of emergency was lifted in the country. In November, the trend resurfaced, as emergency declarations and lockdowns in major markets for Japan, including Europe and the U.S., came into effect. Nissui saw its sales in U.S. grocery stores rise 10 percent as a result of U.S. consumer staying home due to the pandemic, while its foodservice sales were off by 20 percent from the same period last year as restaurants shuttered.
There was a shift to food for household consumption and away from dining out. Tourism and convenience store food sales declined. In Japan and overseas, the business environment was severe in the aquaculture business due to falling unit sales prices and production cuts.
Nissui said marine products business results were poor for the quarter. Many tuna farms suffered damange from a typhoon, and both revenue and income decreased in the salmon/trout business due to reduced production and falling sales prices, the company said. Nissui will reassess its tuna-farming operations and hold its salmon to higher weights, aiming for higher prices, it said.
Toyo Suisan Kaisha, Ltd., also based in Tokyo, had a better performance, primarily due to its non-fish business. The company’s sales and operating profit for the first nine months of the fiscal year rose by 32.9 and 26.3 percent, respectively. The forecast for the full-year was for 21.7 percent sales and 21.9 percent operating profit gains from the prior year.
Toyo Suisan Kaisha’s profits were attributed to good sales of instant noodles, frozen and refrigerated foods, and processed foods for home meals. Each of these categories benefitted from requests for people to stay at home, the company said. However, seafood segment sales fell 12.9 percent for the firm, due to a decline in market prices for products of salmon and trout, and poor fish catches in foreshore operations. A decrease in bonito catch and the decline in the market price of farmed fish also affected the results.
Maruha Nichiro, meanwhile, reported that sales fell 4.9 percent through the third quarter, while operating profit increased 7.5 percent. The forecast for the full fiscal year was a decline of 5 percent in sales and 12.2 percent in operating profit, the company said.
Profits attributable to owners fell dramatically for Maruha, by 49 percent. This was due to a loss on business consolidation related to salmon processing in the U.S. Extraordinary income from insurance claims related to fire damage to the company’s processing facility recorded in the same period of the previous fiscal year will not recur, Maruha said.
The company’s fisheries and aquaculture segment lost ground, with sales off by about 19 percent and operating income – which was marginal last year – going into the red in 2020, due to the drop in skipjack catch in the purse seine fishery and the COVID-19-related decline in the market price of farmed fish.
In the trading segment, net sales in marine products trading decreased due to stagnant sales for foodservice and institutional food business due to COVID-19. However, operating income was increased by shifting sales towards grocery stores. Marine products wholesaling saw lower sales and profits, as sales of local fresh and live fish dropped due to stagnant sales of pricy items for foodservice and institutional food businesses.
In Maruha’s overseas business segment, pet food was profitable, but surimi sales suffered from lower prices and weak European demand. COVID-19 countermeasures in Alaska, along with small-sized Alaska pollock, added to costs.
