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Kyokuyo’s FY March 2014 Breaks JPY 200B in Sales

May 12, 2014

Kyokuyo Co., Ltd. (President Hisaki Tada) posted the results of the previous fiscal year ended March 2014: sales of JPY 202.4 billion (€1.4 billion/$2 billion), or up 13.7 percent from the previous business year; operating profit of JPY 2.915 billion (€20.7 million/$28.5 million), up 25.4 percent; ordinary earnings of 2.985 billion (€21.2 billion/$29.2 million), or up 32 percent; and net income of JPY 2.968 billion (€21.1 million/$29 million), a whopping 133.8 percent jump. In terms of sales, the goal of the mid-term business plan set for FY2015 was successfully achieved ahead of time.

High-Margin Products Favorably Expanded

Marine Products Purchasing reported sales in the amount of JPY 100.4 billion (€714 million/$982 million), up 23.6 percent and operating earnings of JPY 3.046 billion (€21.7 million/$29.8 million), up 91 percent.

Against a backdrop of a favorable, steady market trend throughout the year, the segment focused more on high-margin processed products such as Pacific ocean perch, Atka mackerel, and mackerel fillets, salt-preserved salmon, dressed shrimp, as well as salmon and shrimp for raw consumption, leading to sales and earnings results far better than the previous business year.

The frozen foods segment experienced buoyant sales of raw consumption products, mainly of sushi toppings. The “Dandori Jyozu” series - a collection of boneless fish fillet products, designed to differentiate them from the competition, added more items to target the medical food and office cafeteria sectors. The seafood and deli sections of mass outlets and restaurants steadfastly helped expand sales of crab-flavored kamaboko.

Moreover, the Company newly embarked on the home-use frozen food sector by releasing a new brand Sea Marche, further moving to expand sales of commercial products. The result of the effort was a 10.9 percent sales growth to JPY 56.1 billion (€399 million/$549 million); however, a weaker yen and higher production costs due to increasing material prices and labor costs in overseas factories pressured operating earnings to drop by 59.5 percent, amounting to JPY 127 million (€903,000/$1.24 million).

The canned food segment cited sales of JPY 17.2 billion (€122 million/$168 million), an increase of 11.3 percent and operating profit of JPY 46 million (€327,000/$450,000), down 68.2 percent. A struggle to pass higher costs stemming from a weak yen and growing material expenses onto retail prices contributed to the reduced profit.

The segment of tuna registered JPY 25.5 billion in sales (€181 million/$250 million), down 6.3 percent, and JPY 582 million (€4.14 million/$5.7 million), or down 35.3 percent. In addition to stricter regulations surrounding capturing of wild fried needed for farming business, overseas purse seining suffered lower landings attributable to poor catches in the home waters and reduced work days for dock repairs.

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