Scandal-racked Nippon Meat Packers Inc. said Friday it has sliced its interim and full-year group earnings forecasts for the 2002 business year in response to falling sales and profits in the wake of its involvement in a beef-mislabeling scam.
The company, better known as Nippon Ham, said sales tanked after retailers stripped its products from shelves after news of the scandal broke, and the firm was forced to suspend its beef-related business operations.
Profits were further undermined as Nippon Meat had to take charges against losses incurred by disposing of all products removed from store shelves.
In the revised interim earnings forecast calculated under U.S. accounting rules, Nippon Ham expects a consolidated net profit of 1.5 billion yen, down from 9.5 billion yen estimated in May, and a pretax profit of 5.5 billion yen, down from 16.5 billion yen, on sales of 473 billion yen, down from 495 billion yen.
For the full year, it projects a net loss of 1 billion yen, marking a turnaround from the previously estimated profit of 19 billion yen, and a pretax profit of 3 billion yen, well down from a profit of 33 billion yen, on sales of 900 billion yen, down from 985 billion yen.
The company said it will pay a full-year dividend of 16 yen per share, as earlier forecast.
On Sept. 12, the government filed criminal complaints against the former chiefs of three sales offices of a Nippon Ham subsidiary on suspicion of defrauding the government of nearly 10 million yen in subsidies by having employees knowingly mislabel imported beef as domestic.
Nippon Ham has admitted the chiefs ordered employees to repackage nearly 5 tons of imported beef as domestic to make it appear eligible for the beef-buyback program.
The program was introduced following the discovery of Japan's first case of mad cow disease in September 2001.