Yokorei: Salmon bet triggers ¥24.2bn charge, ¥13.8bn loss

Yokorei will effectively write down or provide against the full balance of its investments and financing to HI and its affiliates, including shares, bonds and loans, booking ¥24.2 billion in special losses for the year ending September 2026. The decision amounts to a substantial impairment of its salmon investment.

• Breakdown of losses: ¥23.6 billion in impairment losses on investment securities and ¥500 million in provisions for doubtful accounts.
• Impact on results: The special losses will reduce total assets by ¥24.2 billion. Including a ¥5.7 billion decline in valuation difference on other securities, the total impact on assets will be ¥29.9 billion.
• Cash impact: The accounting treatment will not result in a cash outflow.

HI is a Norwegian salmon processor and seller. In 2015, a subsidiary of Yokorei's predecessor entered a business alliance with HI that included an equity investment, aiming to integrate operations from farming through processing and sales.

Yokorei now expects consolidated revenue, operating profit and ordinary profit to exceed its previous forecasts, but the special losses will push net income into the red. Compared with the previous year, operating and ordinary profit are expected to rise, while net income will swing from profit to loss.

For non-consolidated results, Yokorei also cut its net income forecast from a ¥5.9 billion profit to a ¥14.5 billion loss. That compares with a ¥3.023 billion profit in the previous year.

• Drivers of revision: In addition to the HI-related special losses, Yokorei incorporated a ¥4.7 billion reversal of a provision for losses on guarantees, a ¥2.5 billion bad-debt loss and a ¥500 million gain on the sale of investment securities. The items relate to the transfer of receivables and shares announced on Sept. 24.
• Conditions at HI: Amid salmon price volatility and U.S. tariff policies, HI recorded net losses for the full years in 2024 and 2025, as well as the second quarter of its fiscal year ending December 2026. Funding needs from business expansion also increased its interest burden, while the market price of its listed green bonds fell about 30% from their issue price.

Yokorei said the developments will not affect core revenue or operating profit, and raised its consolidated operating profit forecast to ¥7.1 billion from ¥7 billion. That would exceed the previous year's ¥4.238 billion, making investment losses the main reason for the forecast net loss.

Yokorei will cut executive compensation voluntarily and withhold performance-linked bonuses following the forecast revision and large losses. It left its dividend forecast for the year ending September 2026 unchanged.

• Pay-return period: Three months starting in November 2026.
• Basic compensation returned: 50% for the president and representative director, 30% for managing directors and 20% for other full-time directors.
• Performance-linked bonuses: No eligible directors or executive officers will receive a bonus.

The measures are intended to clarify management's responsibility and respond to the impact of the special losses. Yokorei made no change to its dividend forecast and did not state the dividend amount in the materials.

Yokorei will not make investments or provide financing to overseas food-related companies during its new medium-term management plan, running from October 2026 through September 2030. It will continue dealings with HI only to procure products needed for its food sales business.

• Investment oversight: Yokorei will tighten its investment criteria and strengthen screening and monitoring, including for affiliates.
• Remaining overseas investments and loans: As of the end of September 2026, Yokorei held ¥800 million in ordinary shares of Hofseth Biocare ASA and had ¥300 million outstanding in loans to U.K.-based Arctic Waters. The Arctic Waters loan has been fully provided for up to the ¥300 million collateral value, and Yokorei is pursuing recovery.
• Governance: Plans include transitioning to a company with an audit and supervisory committee, establishing a secretariat for the board of directors and appointing additional outside directors. The corporate structure change is conditional on approval of the required amendments to the articles of incorporation at the regular shareholders meeting scheduled for December 2027.

Yokorei said it is not aware of other overseas investment or financing projects that could, in principle, lead to similarly large losses. The focus will be on how its halt on new overseas investments and tighter screening shape capital allocation and risk management.