Transitioning from the Traditional Low-Priced Import Model to a Stable-Earnings Model

「We had more opportunities to propose Mexican beef, which was originally low-priced. As a result of pursuing new customer acquisition and renewed sales efforts with existing customers at exhibitions held last November and in March this year, we received high praise for the balance between quality and price in Mexican beef sales in the wholesale business despite the challenging pricing environment. Sales also increased in the mail-order business as proposals to new customers increased.」

「In beef, prices for Australian beef as well as US beef surged to unprecedented levels, creating more opportunities to propose Mexican beef. We strengthened consultative sales through exhibitions and pursued new customer acquisition and renewed sales efforts with existing customers. As a result, despite the challenging pricing environment, our products received high marks for their balance of quality and price. As a result, revenue for the current consolidated fiscal year was ¥4,097 million, up 4.4% year on year, while segment profit (operating profit) was ¥86 million, up 143.6%.」

「Last year, sales volume of our main product, Mexican beef, declined because price fluctuations widened. This year, by explaining not only prices but also changes in the external environment to customers in greater detail, we shifted from sales focused on pitching products to consultative sales. As a result of pursuing transactions that customers could accept, operating profit exceeded the previous year's results.」

「In the Asmo Trading business, product prices rose across the board due to price increases resulting from the yen's depreciation, which was more pronounced than in recent years, compounded by global inflation. In addition, uncertainty over global conditions and climate issues caused major delays in import vessels, resulting in unstable product supplies.」

「As a result, revenue for the current consolidated fiscal year was ¥4,443 million, up 5.9% year on year, while segment profit (operating profit) was ¥76 million, down 34.0%.」

「As a result, revenue for the first 3 quarters of the current consolidated fiscal year was ¥3,443 million, up 5.2% year on year, while segment profit (operating profit) was ¥63 million, down 24.2%.」

「In the meat market, fuel prices surged amid geopolitical uncertainty, while transport costs and grain feed prices remained high. As a result, global inflation drove up prices for imported beef from the United States, Australia and other countries. In Japan, meat prices continued to rise amid the intermittent weakening of the yen, making it difficult to pass higher costs on to selling prices. In September in particular, demand declined and the exchange rate approached ¥150 per US dollar, causing demand to weaken amid soaring prices and hindering profit generation.」

「The increase in revenue resulted from the recovery of performance in the Asmo Trading business and the Asmo Food Service business, which had declined during the COVID-19 pandemic. Improvements in operating profit and ordinary profit resulted from increased handling volumes of high-value-added products in the Asmo Trading business, increased meal volumes and successful negotiations to raise per-unit sales prices with contracted facilities in the Asmo Food Service business, and reductions in hygiene-related expenses that had increased across the segments.」

「We succeeded in capturing food-service demand and increased sales by leveraging our strength in procuring our main product, Mexican beef, steadily from local sources and its price advantage. In addition, inbound demand increased as entry restrictions were eased toward the end of the fiscal year, and the nationwide travel support program stimulated travel, allowing sales to remain strong even in the fourth quarter, when demand usually declines. Although stay-at-home demand in the domestic mail-order business was trending downward, performance was maintained as demand for mail-order sales became established.」

「As a result, revenue for the first 3 quarters of the current consolidated fiscal year was ¥3,272 million, up 32.0% year on year, while segment profit (operating profit) was ¥84 million, up 14.1%. Although a challenging environment is expected as rising prices increase consumers' focus on protecting their household finances, we aim to improve performance by strengthening sales to existing customers and developing new customers, while monitoring domestic consumption trends and the supply-demand balance and promoting the price and product advantages of Mexican beef.」

「With prices for imported beef from the United States, Australia and other countries surging, we have increased sales to new and existing customers by leveraging our strength in procuring Mexican beef steadily from local sources and our price advantage. Sales in the domestic mail-order business also remained stable and exceeded the results for the same quarter of the previous year. However, operating profit increased only marginally year on year due to persistently high logistics costs resulting from higher crude oil prices, higher storage fees and the impact of the weaker yen.」

「In addition to the increase in the cost ratio resulting from higher procurement prices, operating profit declined year on year due to higher selling, general and administrative expenses, driven by higher crude oil prices and inflation.」

「As a result, revenue for the first 3 quarters of the current consolidated fiscal year was ¥2,479 million, up 22.5% year on year, while segment profit (operating profit) was ¥73 million, up 34.6%.」

「Against this backdrop, our direct contracts with local producers of Mexican beef have enabled us to procure Mexican beef steadily at competitive prices, which has become a key strength. As a result, we were able to steadily increase sales and profit, primarily through sales to wholesalers.」

「In the meat market, futures prices in production areas in other countries surged, but products from Mexico maintained their advantage and could be supplied as purchasing prices remained relatively stable, resulting in a gradual improvement in performance.」

「Although the impact of COVID-19 remains a concern, we will focus on sales to industries benefiting from increased stay-at-home demand and seek stable production and supply by developing processing plants for mail-order products.」

「Sales in the online business remained stable, maintaining performance at approximately the previous year's level during the year-end sales season. As a result, sales for the nine-month cumulative period ended in the third quarter were ¥2,023 million, down 24.9% year on year, while segment profit (operating profit) was ¥54 million, down 28.7% year on year. With the reissuance of a state of emergency in January and other factors, it will take time for demand for eating out to recover fully. Going forward, we will focus on recovering business performance by securing sales channels as we look toward the end of the pandemic.」

「Under these circumstances, sales in the online business remained stable and were not significantly affected by COVID-19, but conditions remained difficult, including the inability to sell high-priority chilled beef from Mexico as planned. As a result, sales for the six-month cumulative period ended in the second quarter were ¥1,205 million, down 32.2% year on year, while segment profit (operating profit) was ¥21 million, down 55.9% year on year. Going forward, we will focus on recovering business performance by securing sales channels, viewing the lifting of the Tokyo exclusion from the Go To Travel campaign, the Go To Eat campaign's point rewards beginning in October, and the easing of entry restrictions as tailwinds.」

「Going forward, we will seek to recover sales of chilled beef from Mexico, our top-priority product, reduce inventory and curb unnecessary purchases to minimize low-price sales, and focus on expanding products and sales channels in the online sales business. We will also prioritize sales to industries and business formats where demand is increasing, respond flexibly to changing customer needs, and pursue higher customer satisfaction by highlighting the advantages of our products, including price.」

「As a result, sales for the consolidated fiscal year were ¥3,374 million, up 3.9% year on year, while segment profit (operating profit) was ¥82 million, up 28.9% year on year. Although the impact of COVID-19 remains a concern, we will respond flexibly to changes in target sales channels, including retailers and mass merchandisers where demand is increasing. We will continue to pursue greater customer satisfaction by ensuring a stable supply of processed products for online sales and highlighting their advantages, including price.」

「Under these circumstances, although sales and sales volume declined in the third quarter, we secured stable profit by curbing unnecessary purchases, reducing low-price sales as much as possible, and maintaining sales of our top-priority products. As a result, sales for the nine-month cumulative period ended in the third quarter were ¥2,694 million, up 7.5% year on year, while segment profit (operating profit) was ¥76 million, up 52.8% year on year, resulting in higher sales and profit.」

「In the Asmo Trading business, stable sales have continued for high-profit, high-quality chilled beef from Mexico, which has long been our top-priority product, as has growth in sales through the online sales business using branded beef.」

「In the Asmo Trading business, stable sales have continued for high-profit, high-quality chilled beef from Mexico, which has long been our top-priority product. As a result, sales for the three-month cumulative period ended in the first quarter were ¥926 million, up 10.9% year on year, while segment profit (operating profit) was ¥26 million, up 33.3% year on year.」

「Sales in the online business have gradually increased through proposals for attractive products and an expansion of sales channels. Gift products using branded beef continued to receive orders exceeding expectations even after the year-end peak demand season, producing significant results.」

「In the Asmo Trading business, stable sales have continued for high-profit, high-quality chilled beef from Mexico, which has long been our top-priority product. To stabilize prices and volumes, we have worked to supply products more efficiently by entering into our own type of contract directly with local suppliers.」

「Sales of high-profit chilled beef from Mexico, which we have sold for some time, remained stable. To stabilize prices and volumes, we worked to supply products more efficiently by entering into our own type of contract directly with local suppliers. In the online sales business, sales have also gradually increased through proposals for attractive products and an expansion of sales channels, and sales of curry made with Matsusaka beef exceeded expectations. As a result, sales for the six-month cumulative period ended in the second quarter were ¥1,544 million, up 0.1% year on year, while segment profit (operating profit) was ¥32 million, up 5.2% year on year.」

「In the Asmo Trading business, we faced a difficult operating environment as higher logistics costs and price competition with overseas markets forced prices higher. Under these circumstances, sales of high-profit chilled beef from Mexico, which we have sold for some time, remained stable. To stabilize prices and volumes, we worked to supply products more efficiently by entering into our own type of contract directly with local suppliers. In the online sales business, sales have also gradually increased through proposals for attractive products and an expansion of sales channels. As a result, sales for the three-month cumulative period ended in the first quarter were ¥835 million, up 5.3% year on year, while segment profit (operating profit) was ¥20 million, up 81.7% year on year.」

「Continuing from the first half of the current consolidated fiscal year, we achieved stable purchasing and sales of high-profit chilled beef from Mexico. In particular, customer support for cuts that had previously been difficult to sell in bundled purchases enabled us to develop more stable sales channels.」

「Under these circumstances, we continued to achieve stable purchasing and sales of high-profit chilled beef from Mexico from the first half of the current fiscal year, and began to win greater customer support.」

「In this environment, consistent weekly purchasing and sales of high-profit chilled beef from Mexico, designated as a core product for the current fiscal year, produced a certain level of results in securing sales and profit.」

「Continuing the trend from the previous fiscal year, we focused on high-profit chilled beef from Mexico, whose sales have been growing steadily. By switching from purchasing for 2 consecutive weeks followed by 1 week off to consistent weekly purchasing, we achieved a more stable supply and sales.」

「In the Asmo Trading business, we recognize that it is essential to shift from our conventional model of purchasing products directly from overseas producers and selling them at low prices to a new business scheme. Accordingly, while handling imported and domestically produced meat in a balanced manner, we are building an earnings model capable of securing stable earnings by specializing in high-value-added products. As we seek to recover sales volume, we will also work to ensure that this model can be maintained on a lasting basis.」

「Against this backdrop, we improved our profit margin by focusing on highly profitable Mexican beef and expanding our e-commerce business. As a result, sales for the first nine months of the fiscal year were ¥2,204 million, down 1.4% year on year, while segment profit (operating profit) was ¥61 million, compared with a segment loss of ¥13 million in the same period of the previous year, representing a substantial improvement in profitability. Going forward, while closely monitoring volatile foreign-exchange movements, we will develop a stable customer base centered on end users and secure profit.」

「Against this backdrop, our efforts to expand sales of Mexican beef have enabled us to differentiate it from Australian beef in terms of quality and from U.S. beef in terms of price, allowing us to secure a stable customer base and profits. As a result of shifting our focus from pursuing sales volume to pursuing profit quality, as planned at the beginning of the period, sales for the first six months of the fiscal year were ¥1,435 million, down 0.4% year on year, while segment profit (operating profit) was ¥47 million, compared with a segment loss of ¥19 million in the same period of the previous year.」

「We recognize that it is essential to shift from our traditional model of purchasing products directly from overseas producers and selling them at low prices to a new business model. We are therefore building an earnings model capable of securing stable profits by maintaining a balanced portfolio of imported and domestic meat and specializing in high-value-added products. As we seek to recover our sales scale, we will also work to ensure that this model can be sustained over the long term.」