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Maruha Nichiro: Seafood, Foods Businesses Decide Outcome

May 8, 2014

Tokyo-based food company Maruha Nichiro Corporation (President Shigeru Ito) announced its financial settlement for FY March 2014 as follows (as Maruha Nichiro Holdings): sales of JPY 851.7 billion (€6.06 billion/$8.3 billion), up 5.2 percent over the previous fiscal term; operating earnings of JPY 10.6 billion (€75.4 million/$104 million), down 11.4 percent; and ordinary profit of JPY 13.9 billion (€99 million/$136 million), up 5.3 percent. With an extraordinary loss of JPY 5.042 billion (€36 million/$49.4 million) on product recalls, net income of JPY 3.191 billion (€22.7 million/$31.2 million), down 41.4 percent, was reported.

Leaving Maruha Nichiro Susan as a surviving entity, Maruha Nichiro HD, Maruha Nichiro Foods, and a few other companies got merged on April 1 and Maruha Nichiro Corporation was launched. Because ten Maruha Nichiro HD shares are equivalent to one Maruha Nichiro Corp. share, it is projected that a dividend for FY March 2014 will be JPY 30/ share.

Seafood and Food industries faced a harsh business environment during the prior business year on account of ever increasing purchasing and supply costs stemming from skyrocketing raw material costs and a devaluation of the yen, and their delayed action to pass the inflating costs to retail prices.

As the final year of its mid-term business plan, Double Wave Next (2011-2013), Maruha Nichiro Group invested in seafood suppliers in Europe and fisheries in Australia, and reinforced its business management system through restructuring, for instance selling off its beverage manufacturing company.

Seafood Segment Profits Double to JPY 7.9Bn

The seafood segment reported sales in the amount of JPY 516.7 billion (€3.68 billion/$5.1 billion), or up 6.2 percentage points with the segmental earnings of JPY 7.987 billion (€56.8 million/$78.2 million), up 95.6 percent. In the midst of rising market prices of such major commodities as salmon, trout, shrimp, the Marine Products Trading Unit performed strategies of purchasing at the proper time and front-loaded selling, resulting in outstanding turnover and profit.

The food segment marked a 4.2 percent sales hike to JPY 315.1 billion (€2.2 billion/$3.1 billion); nevertheless, proceeds plunged 57.6 percent to JPY 3.624 (€25.8 million/$35.5 million) in view of a voluntary recall of agricultural chemical laced products by a subsidiary Aqli Foods Corporation, in addition to a cheaper yen and growing raw material expenses.

In response to the incident that involved Aqli Foods, the Company will receive proposals late May from a third party inspection committee consisting of outside experts. Maruha Nichiro aims to promptly restructure its quality guarantee system and risk management system.

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