Japanese food group Maruha Nichiro Corp. has reported lower annual profits amid a drop in earnings from its processed food business.
The company, which was at the centre of a high-profile food recall earlier at the turn of the year, booked a net income of JPY3.2bn for the year to the end of March, down from JPY5.4bn a year earlier.
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The group’s operating income was down 1.4% at JPY10.6bn. Operating profit from its processed foods division fell 4.9% to JPY3.6bn despite rising 12.7% to JPY315.2bn.
The firm attributed lower profits to rising costs and a weaker currency which resulted in an increase in purchasing expenses. There was also a delay in passing through the higher price to consumers.
Overall, Maruha Nichiro Corp. reported a 41.9% jump in net sales to JPY851bn.
It forecast a 57% slide in net income for 2014/15, although it estimates operating income will increase 3.5%.
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By GlobalDataMaruha Nichiro Corp. predicted net sales will dip 0.2% to JPY850bn.
At the end of December, Maruha Nichiro recalled 88 frozen food products produced by its Akurifuzu frozen food subsidiary in Japan’s Gunma Prefecture. The recall was initiated after tests detected the pesticide malathion, which is commonly used in agricultural production, in products including frozen pizza. Malathion has a low toxicity level but can cause nausea and diarrhoea.
