Nichirei 3Q Marks JPY 30B in Profit
February 5, 2014
Tokyo-based company Nichirei Corporation (President Ikuo Otani) reported a drop in profit, which was attributable to a weak yen and skyrocketing material costs, but a significant growth in sales in the third quarter for FY March 2014.
The Company cited sales of JPY 390.8 billion (€2.81 billion/$3.81 billion), up 8.8 percent over the same quarter a year ago; operating profit of JPY 12.9 billion (€92.6 million/$126 million), down 13.8 percent; ordinary earnings of JPY 12.5 billion (€89.7 million/$122 million), down 13.4 percent; and net income of JPY 8.48 billion (€60.9 million/$82.7 million), down 1.6 percent.
For the entire fiscal year, sales of JPY 509.3 billion (€3.65 billion/$4.97 billion), up 8.3 percent; operating earnings of JPY 15.2 billion (€109 million/$148 million), down 15.2 percent; ordinary profit of JPY 13.8 billion (€99 million/$135 million), down 19.8 percent; and net income of JPY 8.7 billion (€62.4 million/$84.9 million), down 11.4 percent. The Company revised sales upward and operating profit downward.
Processed Foods and Cold Distribution, Driving Forces in Sales
Processed foods business raked in JPY 15.8 billion (€113 million/$154 million) and cold distribution JPY 8.6 billion (€61.8 billion/$84 million), resulting in a profit increase of JPY 31.7 billion (€228 million/$309 million) among the Group. Operating profit benefited from smooth operations by cold distribution and seafood business; nevertheless, heightened purchasing expenses driven by a weaker yen that hit processed food operation resulted in a JPY 2 billion-profit decline (€14.4 million/$20 million). Ordinary earnings marked a reduction of JPY 1.9 billion (€13.7 million/$18.6 million) and net income dropped by JPY 100 million (€718,000/$976,000).
Processed foods business experienced a favorable trend of eat-in and ready-made meals, which brought about increased transactions of cooked frozen foods and frozen vegetables. An overseas subsidiary that the Company had acquired last year was another positive contributing factor. Yet, cost increases stemming from a depreciated yen led to a drastic profit fall.
Seafood business in the face of underlying high prices ascribable to a weak yen and supply shortages in production areas, enjoyed a favorable move of reasonably priced octopus. In addition to expanded transactions of food materials, focused efforts on year-end foodstuffs helped both sales and proceeds surpass the first half-year results.
Revenue increases in the areas of domestic distribution operation and area storage operation in cold distribution business were adversely met with contracted profits that resulted from higher electricity rates and depreciation costs involving the operation of new facilities.
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