Prima profits on Nippon slump
today it had raised its full year group net forecast to a profit
from a loss, thanks to strong sales and cost cuts, and its shares
soared in response.
Prima Meat Packers, Japan's third biggest meat processor, said today it had raised its full year group net forecast to a profit from a loss, thanks to strong sales and cost cuts, and its shares soared in response.
Overcoming Japan's mad cow scare and capitalising on the woes of market leader Nippon Meat Packers, Prima said it now expected a group net profit 1.6 billion yen (€13 million) compared with a previously expected loss of 300 million yen.
The announcement pushed up the company's shares by as much as 20 per cent.
Nippon Meat's problems following a beef mislabelling scandal earlier this year created an opportunity for firms such as Prima.
The scandal resulted in a temporary ban on beef sales by Nippon Meat and the removal of its non-beef products from the shelves of leading supermarkets.
Prima Meat also revised up its group sales forecast for 2002/03 by 1.5 per cent to 271 billion yen, saying it had been able to expand sales despite lingering concerns in Japan about beef following five cases of mad cow disease.
The company also said the improved efficiency of its sales and production networks and strong cost cutting efforts had given it confidence about its full year results despite a tough environment for meat companies.
"We believe the tough conditions we saw in the first half will continue...but we think we will be able to secure a profit for the full year and exceed our earlier forecasts due to the continued progress of cost cutting efforts and other factors," Prima Meat said.
The company also raised its group net forecast for the first half of 2002/03 to a profit of 800 million yen from a May forecast of a loss of 1.3 billion. It raised its first half group sales forecast by 3.9 per cent to 134 billion yen.
