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Kyokuyo 1Q: Seafood Trading, Tuna Thrive

August 6, 2013

Tokyo-based seafood company, Kyokuyo Co., Ltd. (President Hisaki Ohta) cited increases in both revenues and profits in the first quarter of FY March 2014. Sales were 44.9 billion yen, up 3.9 percent over the same period last year; operating profit 1.06 billion yen, up 114.5 percent; ordinary earnings 1.14 billion yen, up 63 percent; and net income 877 million yen, up 161 percent.

Marine Products Purchasing, in the course of a bullish trend of seafood prices, put extra efforts into expanding added-value products such as processing materials, salt preserved salmon, shelled shrimp, and frozen processed fish, resulting in higher revenues and proceeds than the previous year.

The Tuna segment also made positive marks in both sales and profit. In spite of upward fish values in overseas purse seining operation, decreased operation days out in the sea due to routine fleet check-ups shrank the catch amount. Aquaculture experienced a favorable harvest. Their farmed products were deemed to be great quality.

Higher Material Costs Result in Profit Contraction Despite More Sales

Processed Marine Products and Canned Food businesses reported increased revenues, but contracted profits. The former segment exerted itself to sell more raw consumption items, mainly of sushi toppings, to leading conveyer belt sushi chains and heating-required items such as boneless fish, broiled fish, and cooked fish primarily of mackerel to medical businesses, home delivery services, and mass outlets. Even though sales exceeded the amount recorded a year ago, profit suffered owing to higher production costs caused by the weaker Yen and ever-growing fierce marketing competition.

Canned Food Business was focused on selling and developing its main product lineups, canned seafood and seafood delicacies, targeting mass retailers and major convenience stores. The efforts terminated in a sales hike; however, more expensive raw materials and a competitive business environment forced its profit to head downward.

Logistics cited lower revenues, but higher profits.

It is the second year of Kyokuyo’s mid-term business plan “Power up Kyokuyo 2015” this year. In an effort to meet the plan goals, a new commercial brand Sea Marche was introduced. The company is preparing to expand the brand’s product line and move the brand further into the home-use frozen food market.

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