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Low gross margin suffers Nissui`s Q3

February 6, 2008

Nissui announced Tuesday its April-December consolidated sales slipped 4.2 percent compared to the same period a year earlier to \408.1billion, while operating earnings were down 33.3 percent to 9.4 billion. The first 9 months net income plunged 57.6 percent to \3 billion as low gross margin ratio pinched profit.

Despite seafood sales gained \1 billion at \180.2 billion with acquisition of F.W. Bryce, overall procurement costs, low profit margin and decreased bread-and-butter-product sales lowered operating profit to \2.4 billion, which was cut by half from the previous year when it was \5 billon.

Sales of seafood increased thanks to acquisition of F.W. Bryce, but decreased sales of surimi, shrimp and salmon, Chile`s salmon farming business, which was severely affected by earthquake and disease, and shrimp farming operation are to blame for the sharp drop of the bottom income, which was cut by more than half, reported the company.

Nissui said its consolidated sales for this business year are expected to down 3.2 percent to \535 billion. The company estimates operating income at \13 billion, a 21.4 percent decrease, and net profit at 12 billion, down 29 percent.

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