Profit growth is concentrated in domestic processing and overseas wholesale, while weakness remains in aquaculture and overseas processing

Cumulative FY2026-Q3 consolidated revenue was ¥28,722 million, up 13.4% year on year, while operating profit was ¥2,851 million, up 27.7%. The operating margin rose to approximately 9.9% from approximately 8.8% a year earlier, indicating that margin improvement contributed in addition to revenue growth. However, the latest materials focus on cumulative Q3 consolidated results and do not disclose consolidated revenue or operating profit for Q3 as a stand-alone 3-month period, so the next assessment will need to take Q1 seasonality into account.

By segment, domestic processing revenue was ¥9,311 million, up 26.6% year on year, and segment profit was ¥1,955 million, up 105.1%. Overseas wholesale also performed well, with revenue of ¥11,006 million, up 27.5%, and segment profit of ¥726 million, up 60.0%. Aquaculture revenue rose only 6.5% to ¥5,604 million, while segment profit fell 27.3% to ¥539 million. Overseas processing revenue rose 5.8% to ¥11,100 million, but segment profit fell 29.0% to ¥546 million, showing that revenue growth is not translating into profit growth.

Among the factors behind the change in cumulative Q3 operating profit, higher revenue contributed ¥687 million, the higher gross margin contributed ¥526 million, and foreign exchange translation effects contributed ¥92 million. These were partly offset by a ¥673 million negative impact from higher SG&A expenses. For the full year, higher profit from domestic processing contributed ¥1,432 million and overseas wholesale contributed ¥440 million, while aquaculture and overseas processing reduced profit by ¥466 million and ¥340 million, respectively. Consolidated profit growth is therefore polarized between the businesses.

At the next earnings announcement, the primary point to check will be whether the improved mix of high-margin products in domestic processing and stronger demand for overseas wholesale translate into year-on-year profit growth in Q1. At the same time, it will be necessary to assess how much of the impact from poor growth and earlier harvesting in aquaculture, and higher raw material prices and delayed price pass-through in overseas processing, remains. All 4 segments do not need to return to profit growth, but the sustainability of earnings growth will depend on whether the declines in aquaculture and overseas processing narrow from cumulative Q3 levels and the consolidated operating margin can remain in the 9% range.