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Yokohama Reito’s Q2 Results: Processed Foods Face Tough Fight

June 2, 2009

Yokohama Reito announced its second quarter financial results, for the period from January 1 through March 31, 2009 (the numbers reported are based on the accumulated sums for its fiscal year starting October 2008). The company reported sales of \54.9 billion, or down 11.7 percent year over year; operating earnings of \271 million, an 87.1 percent decline; and ordinary profit of \392 million, or an 82.3 percent fall. The company’s net profit of the quarter ended in \166 million with an 86.3 percent drop, as a result of an extraordinary loss from the write-down of securities, a total of \158 million. The financial results were attributed to a sudden plunge in livestock prices, leading to outstanding decreases in sales and profit of food sales business.

Cold Storage Business reported sales of \9.942 billion, a 3.7 percent increase over the previous year, and operating earnings of \1.977 billion, down 10.4 percentage points. With stagnating consumer activities creating slow goods circulations, the domestic transaction amount lost 20,000 tons; however, the average quantity of goods storage climbed 11.2 percent. A revenue increase from storage fees offset a profit loss from terminal charges, resulting in profits; yet, the operating profit dropped due to the increasing depreciation of a distribution center, newly constructed during the last term.

In Foods Sales Operation, sales of \45 billion, or a 14.6 percent decrease, were reported. Early livestock goods clearances and a loss on revaluation of inventories led to a operating loss of \972 million. In the midst of a consumer freeze from last October and volatile foreign currency exchange rates, livestock products displayed favorable performances; however, a sudden tumble in the market prices of livestock products engendered a disposal loss. A mainstay item of shrimp realized a revenue increase, and yet it was not enough to compensate a profit decline caused by poor catch of chum salmon.

President Toshio Yoshikawa, referring to the business performance of the third quarter (after April), said, “The transaction quantities of cold storage are not that great; but, the numbers can be inflated somewhat during the months of July through September. Foods Sales, after inventory clearance, remained in the black, which may be able to lessen the red a great deal, even if all the deficit balance accumulated up until the second quarter cannot be totally removed.

The original article was published on June 2, 2009 and was translated by Kiyo Hayasaka.

April Supermarket Stats: Seafood Sales Fall 5.9%

May 29, 2009

The April sales growth rate for 8,089 stores of 70 member companies summarized by the Japan Chain Store Association turned out to be down 3.7 percent, marking a negative growth five month in a row. The uncertainty of the future employment rates and income due to the worsening economy deepened a consumer freeze even further. The firmly moving category of foods slid 1.6 percent, lower than the last year’s record for three consecutive months. However, frozen foods grew, compared with the last year’s result, which performed badly as a reaction to a Tenyo Foods scandal.

There was a 5.9 percent decline in seafood sales. Japanese amberjack and alfonsin exhibited favorable performances; in contrast, tuna, flounder fillet, and eel moved poorly. Sashimi sales stagnated. Fish roe, salted salmon, and salted mackerel also slumped.

Sales of agricultural products increased 0.4 percentage points. Cabbage, lettuce, tomato, broccoli, and bean sprouts performed nicely with the help of the higher going rates. Carrot, kidney beans, and celery, on the other hand, tumbled. Banana sales remained favorably stable.

Livestock product sales registered a 3.8 percent drop. Though domestic pork enjoyed positive business, domestic beef and minced meat moved poorly. Ham and sausages also showed stagnating sales.

Deli products were down 3.5 percent. Salad and rice were sold well; however, Japanese warm deli items and sushi stagnated.

Other food products, including cold foods, fell 0.4 percent. Dried noodles, uncooked noodles, noodle broth, rice, beverage, confection, non-traditional beer (called the third beer), ice cream, and dessert all moved well. Milk and instant coffee were in a slump.

The original article was published on May 29, 2009 and was translated by Kiyo Hayasaka.

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