Free Newsletter

Nippon Suisan: Seafood Business' First Half Year Registers 40% Profit Increase in Surimi Sales

November 14, 2008

Seafood operations of Nippon Suisan for the first half of the year reported total sales of \102.9 billion, a decline of \12 billion from the same period last year, and operating proceeds of \965 million, a \764 million drop.

Domestic sales of surimi, salmon, trout, fish oil, and fishmeal were strong; however equity method attended by corporate separations of Housui and its seafood destitution division, a sales decline in North America, and fish disease outbreaks suffered by salmon farm business in Chile, negatively affected the seafood division.

The company witnessed a drop in transaction volume across the board, except for crab. An amount of surimi plunged 18 percent, however the unit price rose 70 percent, finishing in a 40 percent yield increase. Additionally, an increased amount of crab led to sales hike.

Nippon Suisan Transaction Amount by Item

	‘09 Second Quarter (fiscal year ending March 2009)			’08 Second Quarter (fiscal year ending March 2008)			Yearly Comparison
	Quantity	Amount (million)	Unit Price	Quantity	Amount (million)	Unit Price	Quantity	Amount (million)	Unit Price
Salmon/ Trout	20,627	\13,493	\654	22,015	\15,615	\709	93.7%	86.4%	92.2%
Surimi	12,960	\6,484	\500	15,754	\4,631	\294	82.3%	140%	170.1%
Cold Roe	3,966	\6,220	\1,569	4,373	\6,523	\1,492	90.7%	95.4%	105.2%
Shrimp	5,469	\5,452	\997	6,001	\5,978	\996	91.1%	91.2%	100.0%
Crab	2,295	\3,382	\1,474	1,970	\3,171	\1,610	116.5%	106.7%	91.6%
Others	24,839	\14,905	\600	25,824	\15,077	\584	96.2%	98.9%	102.7%
Total	70,156	\49,936	\712	75,937	\50,995	\672	92.4%	97.9%	106%

The original article was published on November 14, 2008 and was translated by Kiyo Hayasaka.

Nippon Suisan Reports Net Loss of \2 Billion in Q2

November 13, 2008

Nippon Suisan announced its second quarter (interim) results. There were immense decreases all across the board: total sales of \259 billion (a loss of \8.6 billion from the last year's same quarter); operating profit of \2.5 billion (a \3.7 billion decrease); ordinary proceeds of \1.1 billion (a loss of \4.7 billion); and the quarterly net loss of \2.069 billion (a \3.3 billion decline).

Rising seafood prices brought positive results, however food operations were hit hard by growing material costs, in addition to a lack of confidence among consumers in foods made in China.

The unfavorable second quarter performance can be partially blamed on a downturn in professional-grade prepared frozen seafood businesses in North America, salmon aquaculture operation in Chile, as well as the amortization of goodwill by overseas subsidiaries.

Domestic Surimi Sales and Professional Cold Foods Ran Strongly

The company's seafood operation marked total sales of \102.9 billion, a decrease of \12 billion from the same period last year, and operating profit of \965 million, a loss of \764 million. Domestic sales of surimi, salmon, trout, fish oil, and fishmeal were prosperous; however equity method accompanied by corporate separations of Housui and its seafood destitution division, a sales decline in North America, and fish disease outbreaks suffered by salmon farm business in Chile, negatively affected the seafood division results.

As for foods operation, sales increases in fish sausage with "eco-clip" (no use of a clamp), professional frozen foods, and bottled/canned products, and an acquisition of a seafood processing firm in Europe resulted in total sales of \132 billion, an increase of \3.9 billion from the same period last year.

Despite the sales increase, professional-grade prepared frozen seafoods had to fight against a decreasing number of diners in North America. Furthermore, the amortization of goodwill by overseas subsidiaries came to \986 million. Consequently, an operating loss tallied in at \659 million, a \2.058 billion decline from the last year. The amortization of goodwill entailed \626 million by Gorton's Inc., \316 million by King & Prince Seafood Corp, as well as \43 million by Cite Marine S.A.S. in Europe.

Distribution operation registered losses in sales and profits: total sales were \5.587 billion, a \700 million drop from the last year's second quarter, and operation earnings decreased \65 million to \966 million. Cold warehouse business suffered a decline in imported goods and liquidity, in addition to increased expenses for expansion.

Fine chemicals business recorded sales of \11.2 billion (a decline of \1.4 billion) and operating profit of \2.459 billion (a loss of \851 million), resulting from a plummet in sales of medical materials.

Downward Revisions of Business Forecast Caused by Downturn in North American and Chilean Businesses

The company revised down the business projections of the second quarter and the full fiscal term on November 12, 2008: the forecast for the fiscal term ending March 2009 was downgraded to sales of \520 billion from \530 billion (the last year's result: \533.9 billion); operating profit of \9 billion from \13.5 billion (\7.231 billion); ordinary proceeds of \7 billion from \12 billion (\6.758 billion); and net earnings of \2 billion from \5 billion (\9.39 billion last year).

The revisions were made due to a downturn in professional-grade prepared frozen seafood business in North America, a fall in production of farmed salmon in Chile, and a slump in domestic sales of products by food processing companies in China.

The original article was published on November 13, 2008 and was translated by Kiyo Hayasaka.

Inquiry concerning The Suisan Times: suisan@suisantimes.co.jp
Inquiry concerning The Frozen Food Times: reisyoku@suisantimes.co.jp