Summary of Q&A for Results Briefing of the Second Quarter of Fiscal Year 2020 held on November 13, 2020

November 13, 2020

Operating income has been revised downward by 4 billion yen from 19 billion yen to 15 billion yen for the full year. Please tell us about the factors and breakdown.

At the 89th Central Council of the Fisheries Structural Reform Comprehensive Measures Project (Profitable Fishery Project), a large-scale cage with a capacity of about 10 times that of the conventional type was set up off the coast of Kushima City, Miyazaki Prefecture, aiming to expand exports of aquaculture yellowtail. This "Kushima large-scale offshore aquaculture area project" was approved. It seems that Nippon Suisan Kaisha and Kurose Fisheries are also participating in the project, so please tell us how much impact it will have on your future business performance.

Regarding the domestic aquaculture business, I think that the inventory is piled up and there are a lot of fish in the pond. Could you let us know when you can organize it and when you expect the balance between supply and demand to settle down?

As for the state of fish in the pond, yellowtail and tuna are relatively digested. The price of sea bream is declining, but it is being handled. The price of amberjack is falling, but the amount is not handled.
In general, there is a lot of demand for sashimi in izakaya for farmed fish, but the corona sickness reduced the demand for izakaya, which disrupted the supply-demand balance and led to price declines. It will take some time for the izakaya to recover and the fish price to recover.

I think that the aquaculture companies in each region are in a difficult situation due to the corona sickness, but please tell us if you see it as an opportunity for future M & A and expansion of scale.

Please tell us if there are any concerns about the stock status of individual frozen fish of Nissui, such as long-term stock and defective stock.

There is a review of the production system of the food products and chilled business, but please tell us when and how effective it will be.

I think that Nissui has a problem that the profit margin of the individual food products business is low. Could you tell us what kind of problem you are aware of and how you will take measures to raise the profit margin?

Please tell us what the profit margin of Nissui's individual food products business is now, and for example, what is the target of the profit margin in the next few years and three years.

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