July 25, 2007

Profit down 47 percent at Japan's Nichiro Corp on rising seafood costs

Japanese seafood company Nichiro Corp.'s operating profit fell 47 percent on-year to 700 million yen (US$5.8 million) for the April-June quarter as  rising purchasing costs for seafood and the sluggish livestock business took a toll on profits.

Investments in a new frozen food factory and preparations for an upcoming  integration with Maruha Group Inc., a seafood company, also took a drag on Nichiro's profit.

Sales for the quarter are expected at 61.5 billion yen (US$512 million), nearly unchanged from a year earlier.

Although domestic seafood sales fell, sales in North American held up.

Nichiro's packaging machine business and its retail frozen food operations also performed well.

For the half year ending Sept. 30, the firm will likely maintain its earlier projection of sales rising 1 percent to 124 billion yen (US$1 billion) and operating profit growing 15 percent to 2.4 billion yen (US$20 million) as a new factory begins full-scale production.