Yoshinoya D&C Co., Japan's largest operator of "gyudon" beef-on-rice restaurants, scored record sales and pretax profits on a consolidated basis for the first half of its current business year, company officials said Tuesday.

The company attributed the results to a sales campaign in April and a reduction in the price of its regular gyudon dish, which has been selling for 280 yen, down from 400 yen, since July.

However, the recent mad cow scare has caused a slowdown in business, company officials said.

During the March-August period, Yoshinoya's group sales rose 10.8 percent from the same period last year to 76.87 billion yen, while group-wide pretax profits increased 20.5 percent to 10.46 billion yen. Its consolidated operating profits jumped 34 percent to 9.79 billion yen.

But its consolidated net profits decreased 17.9 percent to 3.66 billion yen due to an increase in funds allocated to retirement allowances and corporate pension, company officials said.

On a parent-only basis, Yoshinoya posted 9.8 billion yen in pretax profits, up 16.1 percent from the same period last year, and 9.34 billion yen in operating profits, up 32.7 percent from the previous year. Sales increased 18.4 percent to 46.84 billion yen.

Yoshinoya, which operates 784 gyudon outlets across the nation, reduced the price of regular-size gyudon in a bid to lure consumers.

The number of customers visiting Yoshinoya restaurants that have been open more than a year saw a year-on-year increase in September of 60 percent, while sales at those restaurants were up 20 percent, said Yoshinoya president Shuji Abe.

However, the discovery of mad cow disease in Chiba Prefecture has seen a change in the business environment for beef-related companies.

Sales at Yoshinoya over the past two weeks have declined.

Beef sales at supermarkets and restaurants have dropped by around 30 percent from the previous year, according to Abe, who also serves as a vice chairman of the Japan Food Service Association, which comprises 425 restaurant operators and other food services firms.

"Consumers are overreacting (to news of the mad cow disease case), hearing rumors about it," Abe said, noting that some schools have removed beef dishes from lunch menus. "I'm worried about serious damage to beef-related businesses."

Anticipating a decrease in sales caused by the case of mad cow disease, Yoshinoya, which uses imported beef, forecasts consolidated pretax profits of 19.6 billion yen and group sales of 154 billion yen for the full business year to February 2002.

On a parent-only basis, it predicts pretax profits of 18.7 billion yen and sales of 92 billion yen for the current business year.