Mon, Feb 02, 2009 - Page 12 News List

Japan’s listed firms hit by 71% profit drop

AFP , TOKYO

Japanese listed companies suffered a 71 percent fall in pre-tax profit in the three months to December because of shrinking demand and the yen’s surge against the US dollar, a newspaper survey showed yesterday.

The Nikkei Shimbun survey of earnings reports from non-financial companies said export-dependent manufacturers such as autos and electricals were hardest hit.

Of the 453 companies surveyed, 352 reported profit declines or losses in the quarter, the business daily said.

For the full business year to March, their combined pre-tax profit is estimated to decline 51 percent, in what would be the first drop in seven years.

One in four firms, however, projected growth for the year, the Nikkei said.

“Companies are adjusting inventories at a rapid pace through decreases in production and are rapidly cutting costs,” the daily said.

“There is the possibility of their competitiveness strengthening in the future if they go ahead with reforming their profit structure in the midst of the recession,” it said.

The combined pre-tax profit fell for the fourth straight quarter. The decline was far sharper than the 14 percent slide in the April to June period and the 31 percent fall in July to September.

Manufacturers suffered big losses in the October to December term, with sales falling 14 percent, compared with an 8 percent drop for all surveyed companies.

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