Nissui Q1 FY2027: Record Sales, Operating Profit Up 21%

Nissui’s first-quarter revenue rose 14.1% year on year to **¥257.2 billion**, a record for the April-June period. Operating profit climbed 20.9% to ¥12.4 billion, while net income attributable to shareholders increased 14.3% to ¥7.4 billion.

The growth was fueled by strong performance in the Marine and Fine Chemicals businesses, which offset a profit decline in the Food segment. A weaker yen, with the dollar averaging ¥156.45 against ¥151.21 a year earlier, provided an estimated ¥9.8 billion boost to revenue.

Total assets expanded by ¥33.1 billion from the prior fiscal year-end to ¥782.6 billion, driven by capital investments and higher working capital. Interest-bearing debt rose, pushing the net debt-to-equity ratio to 0.9, above the company’s target range of 0.7–0.8. Free cash flow was deeply negative, but the company prioritized growth investment.

The Marine Business posted revenue of ¥107.6 billion (up 24.6%) and operating profit of ¥5.4 billion (up 72.6%), driven by higher domestic catches of horse mackerel, rising selling prices for sardines and mackerel, and stronger sales volumes and prices for cod, crab, and salmon/trout in North America. The segment also benefited from buoyant domestic sales of yellowtail and fish oil/meal.

The Food Business revenue rose 7.4% to ¥138.2 billion, but operating profit slipped 4.1% to ¥8.4 billion. Higher surimi raw material costs and a pullback in convenience-store demand following the previous year’s special surge outweighed price revisions, particularly hurting the chilled-food unit.

The Fine Chemicals Business revenue climbed 24.4% to ¥3.8 billion, and operating profit swung to ¥0.5 billion from roughly zero a year earlier, supported by robust shipments of pharmaceutical ingredients and functional materials for supplements, along with improved capacity utilization.

The Logistics Business revenue edged up 3.4% to ¥4.2 billion, but operating profit fell 6.9% to ¥0.5 billion due to rising labor costs.

Other revenue rose 3.6% to ¥3.3 billion, with operating profit of ¥0.1 billion.

Total assets at the end of the quarter stood at ¥782.6 billion, up ¥33.1 billion from the fiscal year-end, while the equity ratio dipped 1.0 percentage point to 39.1%. The net debt-to-equity ratio rose to 0.9, exceeding the target range of 0.7–0.8, as strategic acquisitions and capacity expansions pushed up interest-bearing debt.

Operating cash flow turned negative at -¥5.3 billion (vs. +¥2.8 billion a year earlier) as higher receivables from North American food sales and repayment of long-term payables related to the South American aquaculture acquisition consumed ¥11.1 billion in working capital. Investing cash flow was -¥13.3 billion due to increased capex (¥14.5 billion vs. ¥9.1 billion). Free cash flow was -¥18.6 billion, but the company raised ¥28.8 billion via short-term borrowings and commercial paper, securing liquidity.

No dividend increase or share buyback was announced, signalling a near-term focus on growth investment. The outlook for cash flow improvement hinges on a turnaround at the South American salmonid operation and tight working-capital control.

Nissui raised its full-year revenue forecast by 2.0% to ¥1,000.0 billion (previously ¥980.0 billion), while keeping operating profit at ¥42.5 billion, ordinary profit at ¥43.0 billion, and net profit at ¥29.0 billion unchanged. The upgrade reflects a revised yen assumption of ¥155 per dollar (from ¥150) and stronger marine sales, though headwinds such as Middle East instability, raw material inflation, and a slower recovery in South American aquaculture continue to weigh on margins.

Revised segment forecasts are as follows (in billions of yen):

Management acknowledged the South American aquaculture business is off its plan due to disease and survival rate issues, but expects corrective actions to drive a return to profitability by the fourth quarter. Feed cost increases are a second-half concern, though domestic aquaculture productivity gains and smart-factory efficiencies are expected to provide some buffer.

• Geopolitical risk: Middle East instability could disrupt shipping routes and logistics costs, affecting seafood supply and demand.
• Raw material price surge: Higher surimi and feed costs may squeeze margins in the food and aquaculture segments if price hikes are delayed.
• Currency volatility: A stronger yen than the assumed ¥155 per dollar would erode export profitability and overseas earnings.