Tokyo, Japan-based Kyokuyo is planning to continue expanding its overseas business in the wake of its FY2023 report, which featured increased profits despite a drop in revenue.
Kyokuyo posted JPY 261.6 billion (USD 1.67 billion, EUR 1.55 billion) in revenue in FY2023, down JPY 10.5 billion (USD 67.8 million, EUR 62 million), or 3.9 percent, from the JPY 272.1 billion (USD 1.76 billion, EUR 1.61 billion) it posted in FY2022.
The company said falling sales of seafood were the main reason for the drop. By segment, its marine products business and its freshfoods business segments were the core drivers of the decline, while its processed food business saw a JPY 9.95 billion (USD 64.3 million, EUR 59.1 million) increase in sales year over year.
The drop in revenue was offset by significant increases in profit, as the cost of sales dropped from JPY 241.1 billion (USD 1.56 billion, EUR 1.43 billion) in FY2023 to JPY 228.2 billion (USD 1.47 billion, EUR 1.35 billion) in FY2024. As a result, the company posted an operating profit of JPY 8.8 billion (USD 56.8 million, EUR 52.2 million) – an increase of JPY 700 million (USD 4.5 million, EUR 4.1 million), or 8.6 percent, and a record high for the company.
The positive results were released as the company was launching its new medium-term business plan, “Gear Up Kyokuyo 2027.” The new plan builds on its previous medium-term plan, which converted the company's business into a high-profit structure “as the foundation of new growth.”
“While we were very much affected by the Covid-19 pandemic from our first year, we achieved the profit targets of our previous medium-term business plan in the fiscal year ending March 2023 and updated our all-time-high profits,” Kyokuyo said in a release. “This means that to a certain extent, we did achieve a change to a high-profit structure – one that would lay the foundation for new growth by improving our profitability.”
The company said that through the execution of the previous medium-term plan, the company made organizational changes, expanded its production capacity via the completion of a new plant in Thailand, built out infrastructure at production sites overseas, built a new purse-seine fishing vessel, and more.
The now-completed Kyokuyo Global Seafoods facility in Thailand specializes in the production, sale, and export of sushi toppings, simmered fish, and grilled fish, the company said.
On the financial side, the company also launched a public stock offering for the first time since 1961, which it said gave the company the “financial flexibility” to begin its new growth strategy.
According to a presentation on the new initiative, the company said it raised JPY 3.7 billion (USD 23.9 million, EUR 21.9 million) via a public stock offering, which will help it expand its processed food business, expand its overseas businesses, and strengthen its access to resources.
One area the company plans to expand in is North America, where it is working to establish a crabmeat manufacturing company. Ocean’s Kitchen Corporation, established in April 2023, is scheduled to be operational in FY2024, Kyokuyo said.
The company is also planning to establish a food manufacturing subsidiary in Vietnam, which it said will also be operational sometime in FY2024. Additionally, it acquired a stake in a company in Turkey that manufactures and exports frozen food to Europe.
Kyokuyo also launched a joint venture with British Columbia, Canada-based Clear Ocean Seafood in April. The new venture will specialize in processing and exporting scallops from Hokkaido to expand its exports, the company said.
The investment in overseas businesses is part of the “Gear Up Kyokuyo 2027” plan, the company said.
“We aim to further expand and strengthen our overseas business and processed foods business, which has been part of our strategy since the previous medium-term business plan,” Kyokuyo said.
With all of its initiatives combined, the company is aiming for JPY 400 billion (USD 2.58 billion, EUR 2.37 billion) in revenue by the financial year ending March 2027 and an operating profit of JPY 13.5 billion (USD 87.1 million, EUR 80.1 million).
In the nearer-term, the company is forecasting net sales of JPY 300 billion (USD 1.94 billion, EUR 1.78 billion) in FY2024 and an operating profit of JPY 10 billion (USD 64.6 million EUR 59.4 million).
"We will strive to increase our net sales through global development of our businesses, increasing our supply capacity by strengthening our access to resources, increasing our ability to propose products to our customers, and more,” the company said.
