Sakata Seed, a Japanese company specializing in seeds, experienced a significant drop in shares on Tuesday morning. The company’s first-quarter net profit declined due to higher costs, despite seeing revenue growth driven by a weaker yen.
At a recent update, Sakata Seed shares were down 5.7% to 4,180 yen. Earlier in the day, they fell as much as 7.6%.
For the quarter ended August 31, Sakata Seed reported a 6.6% decrease in net profit compared to the previous year, amounting to Y1.96 billion ($13.2 million). It’s worth noting that Japanese markets were closed on Monday for a holiday.
On the positive side, first-quarter revenue saw an 8.0% increase, reaching Y19.16 billion. This growth was primarily attributed to strong sales of tomato, pepper, and sunflower seeds. Additionally, the weakening of the yen contributed to an increase in the value of overseas sales when converted into yen.
However, the company faced challenges as selling, general, and administrative expenses rose by 11% to Y9.48 billion, surpassing the growth in revenue.
Geographically, Sakata Seed experienced a decline in revenue in Japan by 1.4%. In North and Central America, sales dropped by 2.6% in U.S. dollar terms. On the other hand, Europe and the Middle East saw a 1.1% increase in euro terms, while South America experienced a 1.1% growth in Brazilian real terms.
Despite these setbacks, Sakata Seed maintains its earnings forecasts for the fiscal year ending in May 2024. The company expects an 8.7% increase in revenue to Y84.00 billion while projecting a 16% decline in net profit to Y8.00 billion.