Recognition of an Extraordinary Loss (Impairment Loss on Investment Securities and Provision for Allowance for Doubtful Accounts) and Revision of the Full-Year Earnings Forecast for the Fiscal Year Ending September 2026
YOKOREI CO.,LTD., Hofseth International AS and its affiliates. 株式会社アライアンスシーフーズ was absorbed through a merger by YOKOREI CO.,LTD. effective 1 January 2020.
Salmon processing and sales operations of Norway's Hofseth International AS and its affiliates, and shares, corporate bonds and loans
Fluctuations in salmon prices since 2024, a decline in market transaction volumes for Norwegian products resulting from U.S. tariff policies in 2025, increased interest expense payable to financial institutions due to growing funding needs associated with Hofseth International AS's business expansion, and other factors. The company determined that fair value had fallen materially below carrying value because net income for the fiscal years ended December 2024 and December 2025 and net income for the second quarter of the fiscal year ending December 2026 were negative, while the market price of the listed green bonds had also declined by approximately 30% from the time of issuance.
Extraordinary loss of ¥24.2 billion (¥23.6 billion impairment loss on investment securities and ¥500 million provision for allowance for doubtful accounts). The supplementary materials state that extraordinary losses of ¥24.2 billion arose from impairment and provisions relating to assets associated with the Hofseth group.
Fourth quarter of the fiscal year ending September 2026 (1 October 2025 to 30 September 2026)
The full-year consolidated earnings forecast for the fiscal year ending September 2026 was revised. Net sales were revised from ¥125.0 billion to ¥130.5 billion, operating income from ¥7.0 billion to ¥7.1 billion, ordinary income from ¥6.4 billion to ¥6.6 billion, and net income attributable to owners of the parent from ¥6.3 billion to a net loss of ¥13.8 billion. Stand-alone net income was revised from ¥5.9 billion to a net loss of ¥14.5 billion.
As of 2026, the balance of investments and loans to Hofseth International AS and its affiliates was approximately ¥25.1 billion. Virtually the entire amount was subject to impairment and provisions on this occasion, resulting in recognition of an extraordinary loss of ¥24.2 billion.
Company response
Measures to rectify deficiencies in internal controls over financial reporting; establishment of a Risk Management Committee; stricter processes for business investments; establishment of stringent business investment criteria; planned transition from a company with a board of corporate auditors to a company with an Audit and Supervisory Committee; establishment of a Board of Directors Secretariat; appointment of additional outside directors; further strengthening of corporate governance, including tighter investment management; and a policy of making no investments or loans to overseas food-related companies during the period of the new medium-term management plan
For 3 months from November 2026, the Representative Director and President will voluntarily forgo 50% of basic director compensation, Managing Directors 30%, and other full-time directors 20%. No performance-linked bonuses for the fiscal year ending September 2026 will be paid to any eligible directors or executive officers.
The company plans to continue transactions with Hofseth International AS, limited to the procurement of products related to its food sales business. During the period of the new medium-term management plan (1 October 2026 to 30 September 2030), the company will not make investments or loans to overseas food-related companies. It will strengthen its investment review and monitoring framework and corporate governance.
| Item | Details |
|---|---|
| Event name | Recognition of an Extraordinary Loss (Impairment Loss on Investment Securities and Provision for Allowance for Doubtful Accounts) and Revision of the Full-Year Earnings Forecast for the Fiscal Year Ending September 2026 |
| Date of occurrence | 30 October 2026 (the date on which the company resolved to recognize the loss and revise its earnings forecast) |
| Date recognized / date notice received | 30 October 2026 (the date on which the Board of Directors resolved the determination of whether impairment was required) |
| Subject Entity | YOKOREI CO.,LTD., Hofseth International AS and its affiliates. 株式会社アライアンスシーフーズ was absorbed through a merger by YOKOREI CO.,LTD. effective 1 January 2020. |
| Target Locations / Products | Salmon processing and sales operations of Norway's Hofseth International AS and its affiliates, and shares, corporate bonds and loans |
| Cause | Fluctuations in salmon prices since 2024, a decline in market transaction volumes for Norwegian products resulting from U.S. tariff policies in 2025, increased interest expense payable to financial institutions due to growing funding needs associated with Hofseth International AS's business expansion, and other factors. The company determined that fair value had fallen materially below carrying value because net income for the fiscal years ended December 2024 and December 2025 and net income for the second quarter of the fiscal year ending December 2026 were negative, while the market price of the listed green bonds had also declined by approximately 30% from the time of issuance. |
| Amount of Impact on Business Performance | Extraordinary loss of ¥24.2 billion (¥23.6 billion impairment loss on investment securities and ¥500 million provision for allowance for doubtful accounts). The supplementary materials state that extraordinary losses of ¥24.2 billion arose from impairment and provisions relating to assets associated with the Hofseth group. |
| Accounting period in which recognized | Fourth quarter of the fiscal year ending September 2026 (1 October 2025 to 30 September 2026) |
| Impact on Earnings Forecast | The full-year consolidated earnings forecast for the fiscal year ending September 2026 was revised. Net sales were revised from ¥125.0 billion to ¥130.5 billion, operating income from ¥7.0 billion to ¥7.1 billion, ordinary income from ¥6.4 billion to ¥6.6 billion, and net income attributable to owners of the parent from ¥6.3 billion to a net loss of ¥13.8 billion. Stand-alone net income was revised from ¥5.9 billion to a net loss of ¥14.5 billion. |
| Amount of receivables at risk of non-collection or delayed collection | As of 2026, the balance of investments and loans to Hofseth International AS and its affiliates was approximately ¥25.1 billion. Virtually the entire amount was subject to impairment and provisions on this occasion, resulting in recognition of an extraordinary loss of ¥24.2 billion. |
| Measures to prevent recurrence | Measures to rectify deficiencies in internal controls over financial reporting; establishment of a Risk Management Committee; stricter processes for business investments; establishment of stringent business investment criteria; planned transition from a company with a board of corporate auditors to a company with an Audit and Supervisory Committee; establishment of a Board of Directors Secretariat; appointment of additional outside directors; further strengthening of corporate governance, including tighter investment management; and a policy of making no investments or loans to overseas food-related companies during the period of the new medium-term management plan |
| Directors' and officers' liability | For 3 months from November 2026, the Representative Director and President will voluntarily forgo 50% of basic director compensation, Managing Directors 30%, and other full-time directors 20%. No performance-linked bonuses for the fiscal year ending September 2026 will be paid to any eligible directors or executive officers. |
| Outlook | The company plans to continue transactions with Hofseth International AS, limited to the procurement of products related to its food sales business. During the period of the new medium-term management plan (1 October 2026 to 30 September 2030), the company will not make investments or loans to overseas food-related companies. It will strengthen its investment review and monitoring framework and corporate governance. |
Items this document does not state (12)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.Hofseth International AS's performance deteriorated due to external factors, including fluctuations in salmon prices since 2024 and a decline in market transaction volumes for Norwegian products resulting from U.S. tariff policies in 2025, as well as increased interest expense arising from growing funding needs associated with business expansion. In light of Hofseth International AS's net losses over multiple fiscal periods and the decline in the market price of its listed green bonds, the company determined that the fair value of its shares and other holdings had fallen materially below their carrying value.