TOKYO - The Japanese chain famous for serving bowls of beef said Friday that a government ban on US beef imports over mad cow disease fears had helped push the company into the red for the first time in 24 years.
The sour earnings by Yoshinoya come as the United States applies intense pressure on Japan in a bid to persuade the former top export market to start buying its beef again.
But Yoshinoya predicted it would return to profit this year, even if Japan resists the calls to resume buying beef, after it went ahead with cost-cutting and refocuses itself.
Japan in December 2003 stopped buying US beef after a case of mad cow disease was found in a herd in Washington state. Within two months Yoshinoya discontinued its signature dish of gyudon: a bowl of thinly cut beef cooked in sugar and sake and served on rice.
"It was like we had to start a new business all over again," Yoshinoya DC Co Ltd president Shuji Abe told a press conference.
Yoshinoya said it posted a net loss of 758 million yen (6.98 million yen) in the year to February, down sharply from a profit of 5.69 billion yen in the previous year.
The company in the last year booked an operating loss of 1.22 billion yen and a current loss of 1.16 billion yen on revenue of 117.9 billion yen.
It was the first loss for the company since 1980 when it decided to seek a corporate rehabilitation plan.
But for the year to February 2006, the company expects to report 150 million yen in net profit on sales of 125 billion yen and will launch 26 stores.
"People expect the ban of imports of US beef to be lifted this year, but these forecasts are based on the ban continuing throughout the current year," Abe said.
"For the second half to February 2005, we implemented significant cuts in costs, but we plan to relax such measures in the first half to September 2005 to upgrade services and products," Abe said.
Yoshinoya has resisted calls to buy its beef from other countries such as Australia. In February, it reserved beef bowls for one day using stock imported before the ban in a bid for publicity to resume the imports.
US lawmakers have threatened economic sanctions if Japan does not soon reopen its market to US beef, but Japan has said it will wait for the findings of its Food Safety Commission.
04/08/2005 11:45 GMT