Nichirei's seafood profit down

Published on
November 20, 2018

Tokyo, Japan-based cold storage operator and frozen food processor Nichirei Corporation reported a 15.4 percent decline in operating profit in the six months ending on 30 September, 2018, according to the company’s recent financial report. 

The conglomerate – whose business also includes logistics, real estate, and more – posted operating profits of JPY 13.8 billion (EUR 106.7 million, USD 121.8 million), down from JPY 16.2 billion (EUR 125.3 million, USD 143 million) last year. Sales increased slightly compared from a year earlier, from JPY 282.8 billion (EUR 2.2 billion, USD 2.5 billion) to JPY 289 billion (EUR 2.2 billion, USD 2.6 billion).

The group reported lower earnings in its seafood segment. Operating profit for Nichirei’s seafood division for the six-month period was JPY 126 million (EUR 974,451, USD 1.1 million), down from the JPY 225 million (EUR 1.7 million, USD 2 million) profit seen in 2017 for the same time period. 

The company's half-year report said that as a result of more careful purchasing and sales prioritizing profitability, shrimp and shellfish profits increased, but overall profit for the segment declined due to an increase in procurement costs for octopus and fish eggs.

Common octopus (Octopus vulgaris) imported to Japan from Africa in April was 70 percent more expensive this year than it was in 2017 due to a poor spring catch in Morocco and increased consumption in Spain and the United States. The Nikkei Asian Review reported in May that prices had risen to JPY 1,600 (USD 14.89, EUR 12.09) per kilogram, compared to JPY 950 (USD 8.69, EUR 7.18) a year earlier. It has been difficult for processors to pass on the price hikes to consumers.

Contributing Editor reporting from Osaka, Japan

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