Japanese meat processor Prima Meat Packers has cheered investors by upgrading its full-year net forecast from a loss to a profit.

The group had previously forecast full-year group losses of ¥300m but it is now expecting to report a profit of ¥1.6bn (US$12.9m). Shares rose as much as 20% on the news, reported Reuters.

The group, Japan's third largest meat processor, attributed its reverse of fortunes to a gradual recovery from Japan's BSE crisis and cost-cutting measures. It also likely benefited from the misfortunes of sector leader Nippon Meat that arose from a meat mislabelling scandal aimed to defraud a government subsidy scheme. The scheme was intended to help meat processors affected by the BSE crisis by buying up domestic beef, but fraudulent behaviour at Nippon plants saw imported beef relabelled as domestic to unfairly claim the subsidies.

Prima has also revised its 2002-03 group sales forecast upwards by 1.5% to ¥271bn, and expressed confidence despite lingering worries about beef safety among consumers.

"We believe the tough conditions we saw in the first half will continue...but we think we will be able to secure a profit for the full year and exceed our earlier forecasts due to the continued progress of cost cutting efforts and other factors," Prima Meat said.